Midwest economy report stays strong, shows inflation worries
OMAHA, Neb. — The economy in nine Midwest and Plains states remains strong in the wake of a devastating global pandemic, according to new monthly survey of business leaders and managers, but the survey’s index gauging inflation soared to a new record high.
The Creighton University Mid-America Business Conditions for May released Tuesday came in at 72.3, down slightly from April’s record high of 73.9.
Any score above 50 on the survey’s indexes suggests growth, while a score below 50 suggests recession.
While the business leaders surveyed showed strong confidence in economic growth in the region over the next six months, the survey’s wholesale inflation gauge for the month also surged to a record 96.3 from April’s previous record of 96.2.
The survey showed nearly 1 in 3 supply managers naming rapidly rising input prices as their firm’s greatest 2021 economic challenge.
“Since June of last year, metal prices have expanded by 20.8%, and lumber products have advanced by 63.1%, according to U.S. Bureau of Labor Statistics data,” said Creighton University economist Ernie Goss, who oversees the survey.
The survey showed the region’s manufacturing sector added jobs at a modest pace, with nearly a quarter of manufacturers survey saying that finding and hiring qualified workers this year’s greatest challenge. The shortage of workers is pushing up hourly manufacturing wages, Goss said.
The monthly survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Minnesota: The May overall index for Minnesota sank to 74.5 from 79.7 in April. Components were: new orders at 77.5, production or sales at 71.1, delivery lead time at 91.3, inventories at 65.6, and employment at 67.2. “According to U.S. Bureau of Labor Statistics, Minnesota’s average hourly wages for manufacturing production workers climbed by a solid 2.9% over the last 12 months. Both nondurable and durable goods producers in the state accounted for the gains,” Goss said.