The manufacturing sectors in Nebraska and Iowa absorbed another round of blows in December as agricultural equipment manufacturers continued to be stymied by low commodities prices and a stronger U.S. dollar.
Creighton University's latest Mid-America Business Conditions Index showed that manufacturing job losses in those states continued to pile up last month as broader economic conditions stymied exports and sales.
Creighton economist Ernie Goss said weakness in manufacturing has yet to affect other parts of the economy, but he expects that it will during the first quarter of 2016.
Job losses across the nine state survey area stretching from North Dakota to Arkansas in 2015 totaled about 18,000 — that's about half of all manufacturing jobs lost last year in the United States, Goss said.
Among the primary contributors? A stronger dollar, which makes U.S. goods more expensive for overseas trading partners.
"The U.S. dollar strengthened by almost 10 percent in 2015," Goss said. "This, along with economic weakness among the nation's chief trading partners, has squeezed and will continue to squeeze U.S. and regional manufacturers."
The December index fell to 39.6 from 40.7 in November. The index measures economic health using a scale of 0 to 100, with any number below 50 indicating contraction.
The state-level index for Nebraska last month fell to 43.5 from 43.6 in November; Iowa's index fell to 41.2 from 42.3 in November.
For 2016, the December survey highlighted the stronger dollar and persistent global economic weakness as the top risks to manufacturers in Iowa and Nebraska. A combination of the two will continue to keep U.S.-made goods less competitively priced in international markets.
"Areas and industries heavily dependent on manufacturing, especially those linked to exports, agriculture and energy, are experiencing the largest losses," Goss said.
For 2015, food processors in Iowa led that state's gains in manufacturing, while Goss crowned meatpackers in Nebraska as industry leaders for the year. The economist named agricultural equipment manufacturers in both states as the industry "laggards" in terms of performance in 2015.
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