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Fri March 01, 2024

By Press Release

Business

Mid-America Manufacturing Slumped Region Lost Manufacturing Jobs First Two Months of 2024

Business Conditions Economic Outlook Trade Numbers
Mid-America Manufacturing Slumped Region Lost Manufacturing Jobs First Two Months of 2024
February 2024 Survey Highlights: For the third straight month, the overall, or Business Conditions Index, hovered around growth neutral. The region’s manufacturing sector lost jobs for a second straight month. The wholesale price gauge sank into a range indicating only moderate inflationary pressures. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the region’s job openings declined by 156,000, or 16.3%, while layoffs fell by 2,000, or 1.1%.
Every state in the nine-state region experienced a reduction in job openings and layoffs over the past 12 months. Exports and imports plummeted for the month.   OMAHA, Neb. (March 1, 2024) — After climbing above growth neutral for December and January, the Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, slumped below the 50.0 growth neutral threshold for February. Overall Index: The Business Conditions Index, which uses the identical methodology as the national Institute for Supply Management (ISM) and ranges between 0 and 100 with 50.0 representing growth neutral, dropped to 49.1 from 50.9 in January.  “The overall index, much like the U.S. reading, has hovered around growth neutral for last three months. Additionally, supply managers remained pessimistic regarding the 2024 outlook with only 14.3% expecting a 2024 economic expansion,” 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.  The Mid-America report is produced independently of the national ISM.
 Employment: After climbing to growth neutral 50.0 for December, the employment gauge tumbled to its lowest level since June 2020 in January but rose to a weak 42.9 in February. “Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the region’s job openings declined by 156,000, or 16.3%, while the number of layoffs fell by 2,000, or 1.1%,” said Goss.  This month, supply managers reported that the share of their firm’s employment working from home was approximately 14.0%. One supply manager reported that, “0% are working from home.”  “Even so, 43.5% of firms reported a shortage of job applicants, while 13.0% reported that their firm was not hiring due to an economic slowdown,” said Goss.  Other comments from supply managers in February: “Difficult to ignore the problem with labor, also difficult to ignore all of the other problems including the tax of inflation.” “Sales orders are down.”
“The government tells us that inflation is way down, but we are not seeing it.” “We can't allow our government to continue kicking the can down the road. We must get control of our spending and demand a balanced budget!” “While I dislike Trump's personality, I can't argue with his knowledge of business, the economy and desire to have other countries pay their fair share as the U.S. has been abused financially far too long.”   Wholesale Prices: The wholesale inflation gauge for the month fell to 61.9, indicating only modest inflationary pressure, from January’s 71.7. “Approximately 60% of supply managers in February’s survey identified escalating input prices as the top economic threat over the next six months; 15% identified a shortage of workers; 14% reported rising regulations; and the remaining 11% identified a variety of issues,” said Goss.    “Even though the inflation rate and job growth have been trending lower, I do not expect a Federal Reserve rate cut until June or July of this year,” said Goss.
 Confidence: Looking ahead six months, economic optimism, as captured by the February Business Confidence Index, rose to a very weak 33.4 from 31.9 in January. “Approximately 48% of supply managers expect worsening business conditions over the next six months,” said Goss.  Inventories: The regional inventory index, reflecting levels of raw materials and supplies, declined to 54.4 from January’s 58.7. Said Goss, “The question remains, was this contraction intentional, planned or unplanned due to a sales downturn?”  Trade: Trade numbers were very weak for the month with new export orders sinking to 23.9 from January’s 35.8. February’s import reading declined to a weak 38.1 from 47.3 in January.  Other survey components of the February Business Conditions Index were: new orders slumped to 40.5 from 47.9 in January; the production or sales index sank to 42.9 from 45.7 in January; and the speed of deliveries of raw materials and supplies decreased to 54.8 from January’s strong 63.1. The reduction indicates a fall in supply chain disruptions and delivery bottlenecks for the month.  The Creighton Economic Forecasting Group has conducted the monthly survey of supply managers in nine states since 1994 to produce leading economic indicators of the Mid-America economy. States included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.  Below are the state reports:
 Arkansas: The state’s Business Conditions Index increased to 40.9 from January’s 39.9. Components from the February survey of supply managers were: new orders at 39.2; production or sales at 43.2; delivery lead time at 49.3; inventories at 37.8; and employment at 34.8. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 17,000, or 18.3%, while layoffs fell by 1,400, or 23.4%.  Iowa: The state’s Business Conditions Index for February slipped to 49.3 from 51.8 in January. Components of the overall February index were: new orders at 49.6; production or sales at 39.1; delivery lead time at 52.9; employment at 39.1; and inventories at 61.2. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 27,000, or 24.5%, while layoffs fell by 1,200, or 16.8%. Kansas: The Kansas Business Conditions Index for February dropped to 50.7 from 54.0 in January. Components of the leading economic indicator from the monthly survey of supply managers for February were: new orders at 50.7; production or sales at 40.6; delivery lead time at 57.9; employment at 45.1; and inventories at 65.5. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 1,600, or 16.7%, while layoffs fell by 700, or 11.1%.  Minnesota: The February Business Conditions Index for Minnesota sank to 52.4 from 56.0 in January. Components of the overall February index were: new orders at 40.7; production or sales at 44.7; delivery lead time at 59.0; inventories at 71.2; and employment at 46.5. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 12,000, or 5.6%, while layoffs fell by 1,000, or 15.5%.  Missouri: The state’s February Business Conditions Index fell to 46.6 from 50.5 in January. Components of the overall index from the survey of supply managers for February were: new orders at 39.7; production or sales at 43.7; delivery lead time at 52.4; inventories at 58.5; and employment at 38.5. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 51,000, or 25.1%, while layoffs fell by 300, or 7.5%.  Nebraska: For the fourth time in the past five months, Nebraska’s Business Conditions Index moved below growth neutral. The overall reading for February slumped to 45.7 from 50.4 for January. Components of the index from the monthly survey of supply managers for February were: new orders at 40.0; production or sales at 44.0; delivery lead time at 54.7; inventories at 48.8; and employment at 41.3. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 1,300, or 19.4%, while layoffs fell by 1,700, or 30.9%.
 North Dakota: For a third straight month, the state’s overall, or Business Conditions Index, climbed above growth neutral but declined to 51.3 from January’s 53.9. Components of the overall index for February were: new orders at 40.6; production or sales at 44.6; delivery lead time at 58.3; employment at 45.6 and; inventories at 67.5. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 400, or 14.3%, while layoffs fell by 500, or 14.3%.  Oklahoma: For a third time in the past four months, the state’s Business Conditions Index sank below growth neutral to 46.9 from January’s 48.7. Components of the overall February were: new orders at 40.2; production or sales at 44.1; delivery lead time at 55.4; inventories at 52.7; and employment at 42.2. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 14,000, or 11.9%, while layoffs fell by 1,100, or 19.5%. South Dakota: The February Business Conditions Index for South Dakota bounced to a regional high of 56.2 but was down from 56.4 in January, also a regional high. Components of the overall index were: new orders at 41.8; production or sales at 45.8; delivery lead time at 65.8; inventories at 73.1; and employment at 54.7. Over the past 12 months, according to U.S. Bureau of Labor Statistics data, the state’s job openings sank by 200, or 7.1%, while layoffs fell by 300, or 7.1%. Survey results for the month of March will be released on April 1, 2024, the first business day of the month.
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