Business conditions across the Midwest plunged to record lows in December as job losses swelled for an 11th month, according to the survey of supply managers published Friday by Creighton University.
The December Business Conditions Index fell to 33.0 from 37.8 in November, signaling significant economic contraction. A figure below 50 indicates a slowdown. The index, which covers Minnesota, Iowa, North Dakota, South Dakota, Nebraska, Kansas, Missouri, Arkansas and Oklahoma, fell for a third straight month.
"This is stacking up to be the Hurricane Katrina of economic recessions, similar to what the U.S. experienced in the early 1980s when the national unemployment rate soared above 10 percent," said report author and Creighton University Economics Prof. Ernie Goss.
In Minnesota, business conditions declined for the ninth month to an index of 32.2 as new orders, production, jobs and inventories shrunk. Only delivery lead times and the telecommunications sector signaled growth.
"Strength in telecommunications was more than offset by very weak business conditions among durable and non durable manufacturers in the state. Since peaking in March 2008, the state has lost 39,000 jobs," Goss said. "By mid 2009, I expect Minnesota to lose another 15,000 jobs, with the seasonally adjusted unemployment rate approaching 7 percent."
Such results were echoed nationally. On Friday, the Institute for Supply Management reported grave conditions for manufacturers, as not a single industry reported growth in December. Conditions fell for a fifth month, producing a monthly index of just 32.4. New orders contracted for the 13th month, prompting companies to idle plants and slash inventories.
Dee DePass • 612-673-7725