Survey suggests economic slump looming in Midwest
OMAHA, Neb. (AP) — Another economic slump may be developing in the Midwest and Plains states, according to a survey of business leaders released Thursday.
The Mid-America Business Conditions index is based on monthly surveys of business leaders and supply managers in nine states. It includes a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth while a score below 50 suggests decline for that factor.
The overall index dropped to 46.5 last month from 50.4 in September, the report said. It was 57.2 in June but fell below 50 in the following months.
"Surveys over the past several months point to slightly negative growth for the next three to six months," said Creighton University economist Ernie Goss, who oversees the survey. "However, as in (the) past months, two states with significant dependence on energy, North Dakota and Oklahoma, will continue to expand at a positive pace while the rest of the region pulls back.
The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
While business leaders' responses indicated an economic slump was ahead, they expressed more confidence in October than the month before. Last month's business confidence index jumped to 58.0 from September's very weak 44.7.
"Despite less favorable business conditions for their own firms, supply managers are more positive about the overall economy in the months ahead," Goss said. He said drops in the national unemployment rate and upturns in the U.S. housing market were boosting the economic outlook of those who responded to the survey.
In the October survey, the supply managers were asked to gauge the likelihood of a 2013 recession.
The survey report said that 23.4 percent who responded said they thought a recession was likely or very likely next year. But 22.7 percent said they thought a 2013 recession was unlikely. The remainder viewed the chances of a recession at 50-50.
On the jobs front, the region index rose to a weak 47.7 from September's 46.1. The index was 49.5 in August.
The manufacturing sector has been shedding jobs over the past several months, Goss said, and U.S. Bureau of Labor Statistics data for September indicate that the region lost jobs in other areas as well in September.
When the federal data for October are released later in November, Goss said, he expects the numbers will show the region is still losing jobs but at a slow pace.
"Job gains in North Dakota and Oklahoma will be more than offset by declines in the rest of the region," Goss said.
Creighton University economic reports: http://www.outlook-economic.com