Minnesota and Midwest manufacturers swatted off months of listlessness and job losses to report soaring gains in December, according to an economic report issued this week by Creighton University.
With increased exports and the first job gains in six months, Creighton’s nine-state Mid-America Business Conditions index increased to 53.1 in December, up from 46.5 the index reported in November. Minnesota alone also saw a spike, jumping to 52.3 in December from November’s 46.5 index.
Any index below 50 signals economic contraction, a condition that for months plagued factories spanning the country’s central corridor.
December’s output, however, gave respite to economists’ fears as hiring, new orders, exports and inventory levels improved in plants across Minnesota, the Midwest and the nation. Confidence shot up to levels not seen in months.
“This is the second straight increase in the overall index and points to an improving regional manufacturing economy.” said Ernie Goss, director of Creighton’s Economic Forecasting Group. “I expect this to generate even healthier growth for both manufacturing and nonmanufacturing for the first half of 2017.”
Based on survey results from Minnesota supply managers, Goss said he now expects Minnesota “to add another 15,000 jobs for the first half of 2017 for an annualized job growth of 1 percent.”
Plant managers across Minnesota signaled that they hope 2017 brings other wins such as flat mortgage rates and a more normalized U.S. dollar, a factor that strongly affects export orders.
Trade improved across the nine states that include Minnesota, Iowa, Nebraska, Kansas, Missouri, Arkansas, Oklahoma and the Dakotas. The trade index shot to 54 last month from 45.7 in November. Surveyed factory heads indicated concern about possible policy changes under a new Trump administration that could potentially disrupt exports. “Both selling and buying from abroad remain important to firms that we survey,” Goss said. “Trade restraints, if implemented, would slow regional growth.”
A separate report issued Tuesday by the Institute of Supply Management showed that economic activity in the manufacturing sector rose nationwide in December.
The ISM index climbed to 54.7 last month from 53.2 in November as 11 of 18 production categories reported growth. Improvements were led by makers of petroleum/coal; primary metals; miscellaneous manufacturing; food/beverage; apparel; paper; machinery; electrical equipment and appliances; computer products; fabricated metal products; and chemicals.
Entities still struggling included makers of plastics/rubber; furniture; printing; textiles; nonmetallic minerals; and transportation equipment.