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Midwest Economy Improving But Businesses Less Optimistic

Midwest Economy Improving But Businesses Less Optimistic

For a second straight month, the Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, fell, but remained above growth neutral for the month.

In April of this year, COVID-19 pushed the overall index to its lowest level in 11 years. Since April, the overall index has climbed above growth neutral 50.0 for seven of the past eight months. The Business Conditions Index, which ranges between 0 and 100, dropped to 64.1 from November’s 69.0.

Creighton University Economist Ernie Goss, who oversees the survey, said Creighton’s monthly survey results have mirrored the national manufacturing survey results indicating that the manufacturing sector has been expanding at a solid, but slowing, pace since sinking to a post-2008 recession low in April. Even so, Goss says current output in the regional and U.S. manufacturing sectors remains well below pre-COVID-19 levels.

The regional employment index remained well above growth neutral for December, but fell to 57.7 from 63.1 in November. Since the onset of COVID-19, U.S. Bureau of Labor Statistics data indicate that regional nonfarm employment is down 655,000 jobs, or 4.7%, and regional manufacturing employment is off by 66,000 jobs or 4.5%.

The wholesale inflation gauge for the month slipped to a still inflationary 81.5 from 84.8 in November.

While the overall survey was down, Nebraska’s overall index for December rose to 67.0 from 66.8 in November. Components of the index from the monthly survey of supply managers for December were: new orders at 66.3, production or sales at 62.6, delivery lead time at 83.5, inventories at 61.2, and employment at 61.2. Since the onset of COVID-19 in February, the Nebraska economy has lost a net of 35,000 nonfarm jobs, or 3.4%, according to the U.S. Bureau of Labor Statistics. Top performing industry for 2020: Education & Health Services.

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