Manufacturing conditions in Minnesota and eight other Midwestern states showed the fifth consecutive month of gains — with solid reports on new orders and employment, according to a widely watched monthly economic survey.
The Mid-America Business Conditions Index produced by Creighton University increased to 61.4 from 60.1 in March. Any index above 50 signals growth.
In Minnesota, the index slid slightly to 61.2, down from 61.8 in March. Manufacturers generally reported solid results for new orders, sales, delivery lead time and employment. Recent earnings reports from 3M, Graco and Polaris Industries have shown signs that business conditions are improving. All reported higher-than-expected sales or profit results for the first quarter of the year.
Ernie Goss, director of Creighton's Economic Forecasting Group, said he expects more good news in months to come.
"Survey results over the past several months indicate that Minnesota job and economic growth will exceed the national average through the third quarter of this year," he said.
Across the nine-state region, factory leaders and supply managers reported improved sales, hiring and delivery speeds during April even as they wrestled with lower exports, higher inventory levels and lower confidence levels. The region also includes Iowa, North Dakota, South Dakota, Nebraska, Missouri, Kansas, Oklahoma and Arkansas.
Economists were particularly pleased to see employment gains across the region as manufacturers have complained for months that they would like to grow faster, but can't find enough new skilled workers to hire.
April's employment index nudged slightly higher to 62.9 from 62.6 in March, making it "the highest employment gauge recorded since May of 2006," Goss said. "Even with the recent boost in employment growth, total regional employment growth, year over year, is now only 0.9 percent, or approximately half that of the nation."
Four in 10 factory leaders surveyed last month across Minnesota and eight other states identified their biggest challenge as hiring and said that finding enough skilled workers to bring aboard has slowed growth. Some manufacturers have taken to hiring unskilled workers, either sending them to school or developing internal training programs to teach them how to program and monitor sophisticated production machines.
Minnesota factories have done well here, reporting an April employment index of 63.2. The state's overall nonfarm job growth was 1.5 percent for the past 12 months. That surpassed the job-growth rates of the region and matched the national employment trends.
A national report issued Monday by the Institute of Supply Management (ISM) found that the sluggish employment growth picture has persisted. The national index fell to 54.8 in April from 57.2 in March amid slower growth in hiring, new orders and prices. Only production and inventories saw sizable gains during the month.
On the plus side, the ISM producers reported that 16 of 18 manufacturing sectors nationwide remained above "growth neutral" during the month. They were led by electrical equipment, textile mills and nonmetallic mineral products.
Dee DePass • 612-673-7725
