Job gains and increased inventories helped a leading economic indicator for Nebraska, Iowa and the region grow to its highest level in nearly three years.
The Business Conditions Index for February grew to 61 from 54.7 in January and 50.3 in December. An index rating above 50 shows the economy is expanding, and in Nebraska the February index was 58.8, up from the 54.2 mark posted in January.
Iowa’s rating expanded during the month to 58.2 from 52.1.
“Readings over the past several months indicate that the regional economic rebound that is under way will pick up steam in the months ahead,” said Creighton University economics professor Ernie Goss.
Meanwhile, Goss warned of the impact that events in Europe could have on regional economic growth. Because of the economic headwinds that Europe is facing, the value of the dollar has been driven up, negatively influencing the region’s major agriculture sector, Goss said.
The survey of supply managers on which the index is based showed that 23 percent of firms reported job gains while only 11 percent indicated that their firms reduced employment.
The regional employment index score for February was 56.1, an increase over January’s mark of 51.7. It was the first time since July 2007 that the region posted two straight months of expansion.
However, Goss said, he doesn’t expect significant, positive employment change for the region during the first quarter of 2010.
Nebraska should see “minimal manufacturing job gains and very modest overall job gains,” while Iowa won’t see any manufacturing job losses and minimal overall growth, he said.
The nine-state region in the index is made up of Arkansas, Kansas, Minnesota, Missouri, North Dakota, Oklahoma and South Dakota. The states replenished their inventories during February at the highest rate since September 2008.
“This restocking will positively affect growth in the months ahead,” Goss said.
Looking ahead, low interest rates and an improving job market helped boost economic optimism, which was a “strong” 73 in February, compared with 68.5 in January and 69.5 in December, Goss said.
Contact the writer: