The Midwestern economy showed “tepid” growth at the end of 2013, a monthly survey of supply managers showed, led by a gain in Iowa but tempered by a drop in Nebraska.
It was the second straight month that the Mid-America Business Conditions Index tallied above 50, indicating economic growth, said Creighton University economist Ernie Goss, although agriculture-related job losses hurt employment in the nine-state region.
The index was 53.2 in the December survey, up from 51.2 in November.
Goss said growth in business services and durable goods manufacturing offset other declines, including weakness in agriculture due to price declines for grains and other produce.
The survey’s employment index was 48.7, reflecting a decline. Gains in transportation employment were more than offset by the ag-related job cuts.
The survey also indicated wholesale prices are rising, with an index of 63.6 following 61.6 in November.
But Goss said inflationary pressure remained “fairly contained,” even though one-third of the supply managers in the survey said they expect higher prices for raw materials to be a risk in 2014.
The survey’s business confidence index, reflecting a view of conditions six months from now, was 66.5, up from 57.2. Goss said resolution of federal government budget issues and housing market improvements boosted the managers’ outlook.
Other findings of the survey: inventories, 51.3, up from 48.1 in November; trade, 55.6, down from 56.4; new orders, 57.4, up from 57.2; production or sales, 56.8, up from 53.3; and delivery lead time, 52, up from 50.7.
Iowa’s index was 61.5, the highest in the region, from 59.2 in November, with new orders and sales especially strong.
Nebraska’s index was 48.1, down from 48.3 in November. Goss said cutbacks in ag-related manufacturing and higher mortgage rates pushed the state’s index down.
The survey also included Arkansas, Kansas, Minnesota, Missouri, North Dakota, Oklahoma and South Dakota.