Midwest economy shows manufacturing expansion, but worries hurt business confidence | State and Region
A monthly survey of business leaders in nine Midwestern and Plains states, including North Dakota, shows healthy manufacturing growth but also lagging optimism due in part to Ukraine’s invasion by Russia.
Creighton Mid-America University’s headline index for March of business conditions climbed to 71.3 from February 64. Any score above 50 on the survey indices suggests growth, while a score below 50 suggests a recession. March marked the 22nd consecutive month above neutral growth.
“The region continues to add manufacturing activity at a very healthy pace, albeit with modest job gains. Supply chain disruptions and labor shortages have pushed up prices for commodities,” said Ernie Goss, an economist at Creighton University, who is overseeing the survey.
The March index for North Dakota climbed to 75.7 from 63.4 in February. The components were: new orders at 75.1, production or sales at 78.2, delivery times at 86.7, employment at 62.7 and inventories at 75.8. Over the past 12 months, the U.S. Bureau of Labor Statistics recorded that average hourly wages in North Dakota’s manufacturing sector rose 7%, fourth among nine states, nondurable goods makers leading the way in terms of manufacturing job growth in the state.
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Regionally, the survey showed that outside of Arkansas, nonfarm employment remained below pre-coronavirus pandemic levels. Procurement managers on average expected salary growth of less than 3%.
“Given the labor shortage, this moderate increase is surprising,” Goss said.
The wholesale inflation gauge for the month climbed to 95.5, from 80.5 in February and the highest level since last October. Goss called it “the highest and most consistent inflationary pressures at the wholesale level in more than a quarter century of the survey taking place.”
The business confidence index in the survey, which covers six months, fell from a record high of 19.5 in February, but only to 31.7.
“Worries about the impacts of the Russian-Ukrainian war, rising interest rates, soaring inflation and supply chain disruptions have combined to push business confidence well below the neutral growth,” Goss said.
The monthly survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.