OMAHA, Neb. - 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. 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: Arkansas' overall index dropped for a fourth straight month. It hit 39.8 December, down from 44.0 in November and 53.3 in October. Components of the overall index were new orders at 37.0, production at 37.1, delivery lead time at 45.7, inventories at 61.4 and employment at a record low of 32.6. Since peaking in February 2008, the state has lost more than 5,000 jobs, Goss said. "I expect these job losses to continue well into 2009. ... I expect the seasonally adjusted jobless rate to rise above 6 percent in first quarter of 2009, with another 4,000 jobs lost by mid-2009," he said.
Iowa: For the seventh month in a row, Iowa's overall index remained below growth-neutral. It slumped to a record low of 30.4, down 6.4 percentage points from November's 36.8. Components of the overall index were new orders at 19.6, production at 23.9, delivery lead time at 50.0, employment at 39.1 and inventories at 31.8. "A less robust farm economy, the U.S. economic recession and a struggling biofuels industry will place continuing downward pressure on the Iowa economy," Goss said. "I expect Iowa's seasonally adjusted unemployment rate to rise above 5 percent in the first half of 2009 with another 2,000 jobs lost. Losses will also continue for vehicle parts suppliers and related firms in the state."
Kansas: December's overall index dropped to 31.1 from November's 32.7 and October's 50.5. Components of the overall index were new orders at 27.3, production at 22.7, delivery lead time at 45.5, employment at 31.8 and inventories at 40.9. "A weakening transportation equipment manufacturing sector and lethargic farm income will push the state's unemployment rate above 5.2 percent (seasonally adjusted) in the first quarter of 2009, with job losses approaching 3,000 by the end of the first quarter," Goss said. He expects job losses in the state's telecommunications industry to continue as well, although at a slower pace.
Minnesota: The state's overall index fell to 32.2 in December from 33.5 in November 33.5 and 39.1 in October. Components of the overall index were new orders at 23.3, production at 26.8, delivery lead time at 51.9, inventories at 42.1 and employment at 32.5. "Strength in telecommunications was more than offset by very weak business conditions among durable and nondurable manufacturers in the state," Goss said. He expects Minnesota will lose 15,000 more jobs, with the seasonally adjusted unemployment rate running to 7 percent.
Missouri: Missouri's overall index remained below growth-neutral for the third month in a row, dipping to 36.9 from November's already weak 39.3 and October's 48.1. Components of the overall index were new orders at 31.6, production at 35.1, delivery lead time at 43.7, inventories at 40.0 and employment at 40.0. Since October 2007, Missouri has lost almost 24,000 jobs, Goss said. "Based on our surveys, these losses are expected to continue well into 2009," he said. He expects 10,000 more jobs will be lost and the state's unemployment rate to rise a half percentage point.
Nebraska: The state's overall index rose slightly in December, but remained below growth-neutral at 37.1. November's figure was 33.5. Components of the overall index were new orders at 27.5, production at 35.6, delivery lead time at 50.4, inventories at 45.2 and employment at 39.6. Goss said slowdowns have been reported by computer and electronic component manufacturers and by companies with links to vehicle manufacturing. Nebraska has lost more than 9,000 jobs since August. "Based on surveys over the past few months, I expect the state to lose another 5,000 jobs," Goss said. He expects a half-point rise in the unemployment rate by mid-2009. November's rate was reported at 3.7 percent.
North Dakota: North Dakota was one of only two states in the region to report an overall index above growth-neutral last month. The number slipped, however, to 53.9 from 55.7 in November and 61.1 in October. Components of the overall index were new orders at 60.0, production at 56.3, delivery lead time at 56.7, employment at 43.8 and inventories at 46.9. "Even though there are more workers employed in North Dakota than ever before, I expect the national economic recession to weigh on the state in the months ahead," Goss said. Nonetheless, he said he expects the state's unemployment rate to rise two-tenths of a point in the first quarter of 2009. The state reported a November rate of 2.8 percent for nonseasonally adjusted unemployment. That's three-tenths of a point above October's figure of 2.5 percent.
Oklahoma: Oklahoma joined North Dakota in reporting an overall economic index above growth-neutral. The index rose to 51.6 in December from 40.2 in November. Components of the overall index were new orders at 49.3, production at 50.3, delivery lead time at 52.1, inventories at 54.4 and employment at 51.4. "There are more workers employed in Oklahoma than ever before," Goss said, pointing to expansions in mining and natural resources and durable-goods manufacturing. "While Oklahoma's economy has clearly avoided the national recession, I expect recent economic strength to dip as the global economic recession weakens the state's manufacturing sector," he said.
South Dakota: For a third straight month, South Dakota's overall index dropped. It hit 42.5 in December, compared with 47.9 in November and 57.3 in October. Components of the overall index were new orders at 35.7, production at 40.0, delivery lead time at 59.5, inventories at 38.1 and employment at 45.2. Since August, South Dakota has lost almost 3,000 jobs and its unemployment rate has risen two-tenths of a point. "I expect this negative trend to continue, albeit at a slow pace," Goss said. "Based on recent surveys, I expect the state's seasonally adjusted unemployment rate to approach 4 percent in the first half of 2009." November's rate was 3.4 percent, compared with 3.2 percent in October.
On the Net:
Creighton Economic Forecasting Group: http://www.outlook-economic.com