Midwest economy: June state-by-state glance

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Farm Forum

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 for June:

Iowa: Iowa’s overall index rose to a very healthy 67.8 from May’s 66.5. Components of the June index were new orders at 77.4, production or sales at 77.5, delivery lead time at 57.9, employment at 67.3 and inventories at 58.8. “There are more workers on Iowa payrolls than ever before,” Goss said. “Our surveys indicate this expansion will continue. However, China’s recent decision to reject the importation of U.S. dried distillers grains, due to concerns over bioengineered corn, is a risk to the state’s large bioenergy sector, especially if other nations follow suit,” he said. China purchases between one-fourth and one-third of the U.S. output of distillers grain that is exported, and Iowa is the nation’s largest producer, Goss said.

Minnesota: June’s survey results mark the 19th straight month that Minnesota’s overall index has remained above growth neutral. The index jumped to a regional high of 70.1 from 67.3 in May. Components of the index were new orders at 80.0, production or sales at 80.8, delivery lead time at 57.7, inventories at 72.4 and employment at 59.6. “There are more workers on Minnesota companies’ payrolls than ever before,” Goss said. “Our surveys indicate that this expansion will continue setting a new record each month. However, China’s recent decision to reject the importation of U.S. (distillers grain), due to concerns over bioengineered corn, is a risk to the state’s bioenergy sector, especially if other nations follow suit,” he said.

Nebraska: Nebraska’s overall index remained above growth neutral for the sixth straight month, although it slipped in June. It hit 55.2, compared with 55.6 in May. Components of the index were new orders at 59.8, production or sales at 59.0, delivery lead time at 52.3, inventories at 52.5 and employment at 52.6. “Our surveys indicate that Nebraska’s expansion will continue with state employment rising to record levels in the months ahead,” Goss said. But China’s recent decision to reject the importation of U.S. distillers grain because of concerns over bioengineered corn poses a risk to Nebraska’s large bioenergy industry, too, he said. The state is the nation’s second-largest producer of distillers grain, Goss said.

North Dakota: The state’s overall index fell in June, but it hit a level pointing to healthy improvements in the state’s economy. The June reading was 61.6, compared with 65.2 in May. Components of the overall index were new orders at 60.1, production or sales at 56.3, delivery lead time at 53.4, employment at 84.0 and inventories at 54.0. “Almost every month since the fourth quarter of 2007, North Dakota’s employment level has risen to a record high. Our surveys indicate that this trend will continue for the second half of 2014,” Goss said.

South Dakota: The overall index rose to 69.5 from May’s regional high of 68.9. Components of the June index were new orders at 68.9, production or sales at 75.7, delivery lead time at 61.8, inventories at 75.2 and employment at 65.8. “South Dakota’s employment level expanded to a record level for the second quarter of 2014,” Goss said. “Manufacturing continues to expand and boost overall state growth higher. I expect this trend to continue for the second half of 2014,” he said.