The Associated Press January 3, 2012, 12:06PM ET

Midwest economy: December state-by-state glance

The Institute for Supply Management, formerly the Purchasing Management Association, began formally surveying its membership in 1931 to gauge business conditions.

The Creighton Economic Forecasting Group uses the same methodology as the national survey to consult supply managers and business leaders. Creighton University economics professor Ernie Goss oversees the report.

The overall index ranges between 0 and 100. Growth neutral is 50, and a figure greater than 50 indicates an expanding economy over the next three to six months.

Here are the state-by-state results of the December survey in the Mid-America region:

Arkansas: The state's overall index plummeted in December to 52.0 from November's 63.0. Components of the index were new orders at 47.2, production or sales at 51.8, delivery lead time at 53.1, inventories at 55.1 and employment at 52.3. Arkansas manufacturers have reduced employment at the same time that they have increased production. "As a result of higher productivity and increases in the hours worked for current employees, manufacturing activity expanded significantly for 2011. I expect this rate of growth to weaken for the first half of 2012," said Goss. For 2012, Goss predicts job growth of 0.3 percent and an inflation-adjusted increase in the state's gross domestic product of 1.6 percent.

Iowa: For the 24th month in a row, Iowa's overall index remained above growth neutral. It dipped to 56.3 in December from 57.7 in November. Components of the index were new orders at 65.3, production or sales at 53.9, delivery lead time at 55.8, employment at 56.6 and inventories at 50.2. Iowa manufacturers reported strong business conditions for the month, Goss said, and they added to their payrolls in 2011. "While strength in the U.S. dollar and a weaker global economy will be a challenge, the state's economy will perform well for the first half of 2012," he said. Goss predicts Iowa's 2012 job growth at 0.7 percent and an inflation-adjusted increase in the state's GDP of 2.4 percent.

Kansas: The state's overall index slipped to 50.1 from 50.9 in November, pointing to slow growth for the Kansas economy in the months ahead. Components of the index were new orders at 51.0, production or sales at 51.1, delivery lead time at 46.3, employment at 52.8 and inventories at 49.4. Kansas manufacturers reported solid business conditions for the month and for most of 2011. "However, a stronger U.S. dollar and weaker global growth will slow growth for the state's economy for the first half of 2012," Goss said. He predicts 2012 job growth of 0.6 percent in Kansas and an inflation-adjusted increase in its GDP of 2.1 percent.

Minnesota: Minnesota's overall index remained above growth neutral for the 29th straight month. It rose to 56.9 in December from 54.7 in November. Components of the index were new orders at 57.7, production or sales at 64.1, delivery lead time at 63.0, inventories at 52.7 and employment at 46.9. Durable-goods manufacturers, especially those dependent on exports and agriculture, continue to experience healthy growth as nondurable-goods producers reported slowdowns in recent months, he said. Goss predicts 2012 job growth of 1.2 percent in Minnesota and an inflation-adjusted increase in its GDP of 2.8 percent.

Missouri: The state's overall index rose from its weak November mark but still remained below growth neutral. It hit 49.0 in December, compared with 47.3 in November. Components of the index were new orders at 47.6, production or sales at 50.1, delivery lead time at 55.5, inventories at 46.1 and employment at 45.6. Durable-goods manufacturers reported solid business conditions for December, but that growth was more than offset by economic pullbacks among nondurable-goods producers and value-added service firms, he said. Goss predicts a 2012 job loss of 0.7 percent for Missouri and an inflation-adjusted GDP growth of just 0.1 percent.

Nebraska: The state's overall index remained above growth neutral 50.0 for the 14th month in a row but dropped to 51.4 from 55.2 in November. Components of the index were new orders at 50.2, production or sales at 45.5, delivery lead time at 53.7, inventories at 53.1 and employment at 54.3. Nebraska manufacturers experienced a very positive month and year, Goss said. "Contrary to firms in other Mid-America states, Nebraska manufacturers expanded employment while holding average weekly work hours little changed," he said. Goss predicts Nebraska job growth of 2.0 percent in 2012 with an increase of 3.3 percent in its inflation-adjusted GDP.

North Dakota: North Dakota's overall index slipped to 55.6 in December from 57.9 in November. Components of the index were new orders at 56.3, production or sales at 54.5, delivery lead time at 55.6, employment at 53.4 and inventories at 58.1. Durable-goods manufacturers outperformed nondurable-goods manufacturers for the month and for the year, Goss said. "Manufacturers increased employment, hours worked and wages significantly for 2011," he said. "I expect this to continue for 2012 but at a somewhat slower pace." Goss predicts a 2012 job growth of 3.4 percent in North Dakota and a 5.7 percent increase of its inflation-adjusted GDP.

Oklahoma: The state's overall index dropped to 52.1 from November's 52.5. Components of index were new orders at 52.3, production or sales at 52.1, delivery lead time at 54.8, inventories at 53.4 and employment at 51.0. Durable-goods manufacturers expanded business for the month and year, while nondurable-goods manufacturers reported slowdowns. Goss predicts 2012 job growth of 1.5 percent in Oklahoma and an increase in the inflation-adjusted GDP of 3.3 percent.

South Dakota: South Dakota's overall index dropped below growth neutral in December. It hit 47.7, compared with 50.3 in November. Components of the index were new orders at 47.2, production or sales at 41.2, delivery lead time at 44.6, inventories at 47.9 and employment at 57.4. "Contrary to earlier in the year, manufacturing in the state tied to international markets and to agriculture and energy experienced pullbacks over the past few months. I expect this slower growth to extend into 2012," Goss said. He predicts 2012 job growth of 0.3 percent in South Dakota and a 2.4 percent increase in the inflation-adjusted GDP.

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Creighton Economic Forecasting Group: http: //http://www.outlook-economic.com


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