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Mid-America Index Slumps In August

(KFOR NEWS  September 3, 2019)  The August Creighton University Mid-America Business Conditions Index, a leading economic indicator for Nebraska and an 8 -state region, fell below growth neutral for the first time since November 2016.

  • Business confidence slumped to 35-month low.
  • Export orders and imports slumped for the month.
  • Approximately 44% of supply managers indicated that tariffs and trading issues were the greatest economic challenge for their company in the next 12 months.
  •  Six of 10 supply managers reported their customers would be paying the greatest share of tariffs.

Overall index: The Business Conditions Index, which ranges between 0 and 100, slumped to 49.3 from July’s 52.0. After 32 straight months of above growth neutral readings, the region’s overall index moved below 50.0 in August.

“The regional economy expanded at a slower pace than the rest of the nation for the first eight months  of 2019,” said Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.

“Weakness in the region’s farm and manufacturing sectors produced by tariffs and a global economic slowdown pulled regional growth below that of the nation. Based on our manufacturing survey over the past several months, I expect overall growth to slow and potentially move into negative territory in the months ahead,” said Goss.

Nebraska: After two straight months with above growth neutral readings, Nebraska’s Business Conditions Index once again fell into negative territory. The state’s overall index tumbled to 49.3 from July’s 52.9. Components of the index from the monthly survey of supply managers were new orders at 49.6, production or sales at 51.6, delivery lead time at 59.7, inventories at 42.3, and employment at 43.4. “U.S. Bureau of Labor Statistics data indicate that Nebraska manufacturing workers ranked eighth in the nine-state region with a 1.2% increase in hourly earnings over the past year. Job growth over the past 12 months was flat for durable goods producers while nondurable manufacturers in the state experienced solid and positive growth.  However, the state’s manufacturing sector lost jobs in August according to Creighton’s survey,” said Goss.

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