Manufacturers across Minnesota and the Midwest continued solid growth in May, albeit at a slower pace than in April.
Mid-America Business Conditions Index for Minnesota and eight other central states showed growth, reporting an index of 55.5 in May from 61.4 in April, according to the widely watched report produced by Creighton University. Any index above 50 signals expansion for factories.
In Minnesota, the growth index was 58.4, down from 61.2. Surveyed Minnesota supply managers noted positives during the month, including new orders, sales, delivery lead times, inventories and employment.
The state saw “slight job gains for both durable and nondurable goods producers in the state” in May, said Ernie Goss, the report’s author and director of Creighton’s Economic Forecasting Group. “Medical equipment manufacturers continue to expand at a solid pace as transportation equipment producers reduced jobs and economic activity.”
Creighton’s report and upbeat outlook echo outcomes seen in recent weeks by Enterprise Minnesota and the Minnesota Department of Employment and Economic Development and by U.S. Bank.
Even with slower growth in the overall region — which includes Minnesota, Iowa, South Dakota, North Dakota, Nebraska, Kansas, Missouri, Oklahoma and Arkansas — confidence levels among surveyed producers remained strong at 61.4 in May.
“Strong profit growth and still-low interest rates boosted the economic outlook among supply managers in the nine-state region,” Goss said. “The overall index over the past several months indicates a healthy regional manufacturing economy, and points to healthy growth for both manufacturing and nonmanufacturing through the third quarter of this year.”
A separate national report issued Thursday by the Institute for Supply Management (ISM) found that U.S. producers grew for the 96th consecutive month.
The ISM manufacturing index rose slightly to 54.9 in May from 54.8 in April as new orders, employment and inventory inched upward.
The month also saw higher raw material prices, which was expected to have a positive impact on margins, ISM officials said.
For the month, 15 of 18 U.S. manufacturing industries saw growth in May.