Midwest economy improving but businesses less optimistic

Associated Press
Farm Forum

OMAHA, Neb. — The economy continues improving in nine Midwest and Plains states but business leaders are less optimistic after the latest surge in coronavirus cases in the region, according to a new monthly survey released Jan. 4.

The overall index for the region suggests strong growth even though it dipped to 64.1 in December from November’s 69. Any score above 50 on the survey’s indexes suggests growth, while a score below 50 suggests recession.

Creighton University economist Ernie Goss, who oversees the survey, said the manufacturing sector has been growing steadily since restrictions related to the virus started to be relaxed in the spring, but current activity still remains below the level it was at before the pandemic began.

Goss said the survey’s confidence index suggests business leaders are worried about the economy after the recent growth in virus cases across the region. The confidence index dipped into negative territory at 45.8 in December from November’s neutral score of 50.

Companies were still hiring last month, but the pace of job growth slowed. The employment index declined to 57.7 in December from November’s 63.1. Goss said the region still has 4.7% fewer jobs now than when the pandemic began — a decrease of about 655,000 jobs.

The monthly survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Here are the state-by-state results for December for states in the Farm Forum coverage area:

Iowa:

  • Iowa’s overall index remained in positive territory in December though the reading declined to 64.7 from 74.6 in November. Components of the overall index were: new orders at 66.2, production. or sales at 62.5, delivery lead time at 83.0, employment at 55.6, and inventories at 57.7. Since the onset of COVID-19 in February, the Iowa economy has lost a net of 78,000 nonfarm jobs, or 4.9%, according to the U.S. Bureau of Labor Statistics. Top performing industry for 2020: financial activities.

Minnesota:

  • The overall index for Minnesota declined in December to 67.6 from 73.2 in November. Components of the overall index were: new orders at 67.3, production or sales at 63.8, delivery lead time at 88.5, inventories at 54.0, and employment at 64.4. Since the onset of COVID-19 in February, the Minnesota economy has lost a net of 195,000 jobs, or 6.5%, according to the U.S. Bureau of Labor Statistics. Top performing industry for 2020: financial activities.

Nebraska:

  • Nebraska’s overall index for December rose to 67 from 66.8 in November. Components of the index were: new orders at 66.3, production or sales at 62.6, delivery lead time at 83.5, inventories at 61.2, and employment at 61.2. Since the onset of COVID-19 in February, the Nebraska economy has lost a net of 35,000 nonfarm jobs, or 3.4%, according to the U.S. Bureau of Labor Statistics. Top performing industry for 2020: education & health services.

North Dakota:

  • The overall index for North Dakota increased in December to 62.8 from 57.2 in November. Components of the overall index were: new orders at 64.4, production or sales at 60.3, delivery lead time at 74.2, employment at 55.2, and inventories at 60.0. Since the onset of COVID-19 in February, the North Dakota economy has lost a net of 33,000 nonfarm jobs, or 7.4%, according to the U.S. Bureau of Labor Statistics. Top performing industry for 2020: financial activities.

South Dakota: The overall index for South Dakota climbed to 76.3 in December from 71.7 in November. Components of the overall index were: new orders at 67.3, production or sales at 63.9, delivery lead time at 88.7, inventories at 96.9, and employment at 64.5. Since the onset of COVID-19 in February, the South Dakota economy has lost a net of 15,000 nonfarm jobs, or 3.5%, according to the U.S. Bureau of Labor Statistics. Top performing industry for 2020: construction.