Midwest economic survey suggests big improvement in December

Published 10:17 am Tuesday, January 3, 2017

OMAHA, Neb. — Soaring numbers in a monthly survey of business supply managers suggest that economic conditions are improving in nine Midwest and Plains states, according to a report issued Tuesday.

The Mid-America Business Conditions Index report shows that the overall economic index for the region jumped to 53.1 in December from 46.5 in November. The October figure was 43.8.

“This is the second straight increase in the overall index and points to an improving regional manufacturing economy,” said Creighton University economist Ernie Goss, who oversees the survey. “I expect this to generate even healthier growth for both manufacturing and nonmanufacturing for the first half of 2017.”

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The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers said any score above 50 suggests growth in that factor, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

After six consecutive months of below-growth survey readings, the regional employment gauge for December rose to its highest level since May 2016, climbing to 50.9 from 41.9 in November.

“The growth gap between regional manufacturing and nonmanufacturing appears to be closing. The key for regional manufacturing will be any changes in sales abroad driven by the value of the U.S. dollar and global economic improvements,” Goss said.

Looking ahead six months, economic optimism, as reflected by the December business confidence index, rose to 63.3 from 61.6 in November.

Supply managers bolstered their inventories in December, which survey organizers said was another sign of growing confidence in the regional economy. The inventory index, which tracks the change in the level of raw materials and supplies, jumped to 52.8 from November’s 42.8.