Survey: Outlook bleak for Midwest, Plains economy
OMAHA, Neb. (AP) – The economy showed a small improvement last month in nine Midwest and Plains states, but a survey of business leaders released Monday suggests the outlook remains bleak and job losses will continue.
Companies producing durable goods continued to cut jobs in February and international sales remained weak, said Creighton University economics professor Ernie Goss, who oversees the survey.
“I expect job losses to continue for the next six months with unemployment rates rising for all nine states in the Mid-America region,” Goss said.
In February, the overall index for the Mid-America Business Conditions survey increased slightly for the second straight month, to 34.6 from January’s 33.5. But the index remained below 50, in negative territory.
The survey’s index ranges between 0 and 100, and any score below 50 on the index suggests a contracting economy over the next three to six months.
The survey states are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The February employment index rose to 33.1 from January’s record low of 29.
“I expect job losses to continue for the next six months, with unemployment rates rising for all nine states in the Mid-America region,” said Goss.
The survey shows business leaders remain concerned about the economy when looking ahead six months. The confidence index rose to 31.5 in February from January’s 23.6.
The prices-paid index, which tracks the cost of raw materials and supplies, climbed to 37.7 from 34.1 in January and December’s record low 33.0.
Goss said he’s worried that all the measures the Federal Reserve has taken recently to stimulate the economy will result in excessive inflation sometime in 2010.
Trade numbers improved slightly in February but remained weak. The export index hit 29.9 after seven-straight months of decline. That was up from January’s record low of 26.8.
The February import index dipped to 38.7 from January’s 39.1 and December’s 43.8.
“Economic weakness among our trading partners and a strong dollar continue to restrain exports,”Goss said.
Other components of February’s overall index were:
- New orders at 30.7, up from January’s 28.6.
- Production at 30.2, down from January’s 32.8.
- Inventories at 39.9, up from January’s 38.7.
- And delivery lead time at 48.4, up from January’s 47.2.
Goss and the Creighton Economic Forecasting Group have conducted the monthly survey since 1994.
The Institute for Supply Management, formerly the Purchasing Management Association, began to formally survey its membership in 1931 to gauge business conditions. The Creighton Economic Forecasting Group uses the same methodology as the national survey.
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