Slow growth likely in 9 Midwest, Plains states
OMAHA, Neb. (AP) — The temporary resolution of the budget stalemate in Washington, D.C., has made business leaders more optimistic in nine Midwest and Plains states, but only modest economic growth is expected in the near future.
The monthly survey’s overall economic index crept up to 51.2 in November. That’s just above the growth-neutral 50 score recorded in October.
“I expect the holiday buying season to be up from last year, but it will not be a robust holiday buying season, with sales up between 3 and 4 percent from last year,” said Creighton University economist Ernie Goss.
The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. Its results were compiled into a collection of indexes ranging from zero to 100. Survey organizers said any score above 50 suggests growth, while a score below that suggests decline.
Business leaders are feeling more optimistic after the nation’s leaders agreed to a temporary fiscal deal that ended the partial government shutdown on October, Goss said. The confidence index improved to 57.2 in November from October’s 56.
The region’s employment index rebounded to 51.2 in November from October’s 48.2.
“The lack of significant new hiring over the past several months will restrain growth in 2013 holiday buying,” said Goss, who oversees the survey.
In North Dakota, the overall index decreased to 55.3 in November from 59. Components of the overall index were new orders at 51.5, production or sales at 47.7, delivery lead time at 73.6, employment at 61.3, and inventories at 42.7. “Durable goods manufacturers and construction firms linked to North Dakota's large energy sector continue to experience very healthy economic activity,” Goss said.
The region’s heavy manufacturers reported solid increases in new export orders in November. The export index jumped to 56.4 in November from 44.4. And the import index improved to 53.5 from October’s 48.5.
Inflation pressure on businesses has been easing recently, according to the survey. The prices-paid index, which tracks the cost of raw materials and supplies, declined to 61.6 in November from 63.1 in October.
The inventory index that tracks the level of raw materials declined to 48.1 in November from October’s 50, but Goss said inventory levels are still up from this time last year.
“This is another signal that supply managers are more upbeat about expanding sales for their companies in the months ahead,” Goss said.
The other components of November’s overall index were:
* New orders at 57.2, up from 47 in October.
* Production or sales at 53.3, up from October’s 51.2.
* And delivery lead time declined to 50.7 in November from 53.
Creighton University economic reports: http://bit.ly/IAwEDt