Report says Midwest, Plains economy remained strong in August, suggesting growth ahead

  • Article by: Associated Press
  • Updated: September 2, 2014 - 10:25 AM

OMAHA, Neb. — The economy remained strong in nine Midwest and Plains states in August, and a monthly survey of business leaders released Tuesday suggests growth will continue in the months ahead.

The region's overall economic index inched up to 57.2 last month from 57 in July. The index reached a three-year high of 60.6 in June.

But as the economy improves, delays in supply shipments are becoming more common, said Creighton University economist Ernie Goss, who oversees the survey.

"One supply manager complained that rail shipping had become particularly problematic as shipments of energy products and housing inputs have begun to take up shipping space," Goss said.

Those delays were apparent in the delivery lead time index, which tracks how long business leaders had to wait between placing orders and taking delivery. That index jumped to its highest level in over three years at 60.6 in August, up from July's 53.7.

The monthly results of the survey of supply managers are compiled into a collection of indexes ranging from zero to 100. Survey organizers at Creighton University say any score above 50 suggests economic growth, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Business leaders remain confident in the economy over the next six months, the survey showed, as the confidence index climbed to 60.4 from 60 in July. It reached 63.6 in June.

The employment index fell into negative territory to 48.7 in August from July's 53.8. But Goss said employment trends vary widely across the region, with North Dakota, Missouri and South Dakota recording more job growth than the national average.

The prices-paid index, which tracks the cost of raw materials and supplies, remained elevated but declined to 66.7 in August from July's 67.6.

The inventory index increased to 57.9 in August from July's 51.3, suggesting that businesses are stocking up on raw materials to satisfy growing demand in the future.

The other components of the overall August index were:

— New orders declining to 58.1 from July's 61.5.

— Production or sales decreasing to 60.7 in August from July's 65.

— The export index increasing to 59.8 in August from 57.5.

— The import index falling to 51.8 from July's 57.7.

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