Negatives Get Less Negative for Mid-America Economy in June

(KFOR NEWS July 1, 2020) The June Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, advanced above growth neutral.

Overall index: After falling below growth neutral for three straight months, the overall index bounced into positive territory for June. The Business Conditions Index, which ranges between 0 and 100, increased to 50.3 from May’s 43.5.

June survey highlights:

For a ninth straight month, the overall index rose above growth neutral.
On average, bankers estimated that farmland prices declined by 4.0 percent over the past 12 months and expect farmland prices to fall by another 3.2 percent over the next 12 months.
Approximately one-fifth of bank CEOs expect low farm income and falling farmland prices to present the greatest challenge to banking operations over the next 5 years.
Loan demand by farmers remains strong.

“While the June reading was much higher than I expected, it provides no grounds for celebration. June’s above growth neutral reading indicates that between May and June, business conditions improved. It will take many months of above 50.0 before the regional economy returns to pre-Covid-19 levels,“ 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.

Nebraska: The state’s overall index for June rose to 52.6 from 43.9 in May. Components of the index from the monthly survey of supply managers for June were: new orders at 59.1, production or sales at 55.2, delivery lead time at 55.5, inventories at 54.6, and employment at 38.9. “Since the onset of COVID-19, Nebraska has lost almost 77,000 jobs, or approximately 7.5% of its employment. Our surveys point to a flattening of employment with only slight job gains in the months ahead,” said Goss.