The nation's factories continued to rebound last month from the sharp downturn earlier this year, new data showed Tuesday, though Minnesota's were coming back at a slower pace.

"June, July, and now August, all three months are up, so we're moving in the right direction," said Ernie Goss, who leads the Creighton University Mid-America Business Conditions Index. "But we're still not back to pre-COVID levels."

Minnesota's score on that manufacturing index slipped slightly to 54.5 in August, down from 54.7 in July. But since it registered above 50 on the 0 to 100 scale, it signaled continued expansion.

The overall index for the nine-state region rose to its highest level in two years to 60.0, up from 57.4 in July. It mirrored the trajectory in a national manufacturing report put out by the Institute for Supply Management. Its index of manufacturing conditions rose to 56 in August, up from 54.2 in July.

"Minnesota is still down as much as 4 to 5% from pre-COVID levels — that's a little more than the region," said Goss. "But we're making up some of that each month."

If conditions continue to improve as similar rates, he predicted that manufacturing could be fully recovered by January or February.

Both the regional and national reports, which are based on surveys of manufacturing executives, showed increases in demand with new orders strengthening even further in August.

But employment growth in the industry continues to struggle. In the national report, it improved slightly in August, but remained in contraction.

In the regional report, employment moved above neutral for the first time in months.

But Goss noted that 80% of employers in the survey said they were having trouble finding and hiring qualified workers despite the high level of unemployment.

Timothy Fiore, who chairs the committee that puts out the national report, said there are signs that employers are having a hard time bringing people back for several reasons, including health and safety concerns.

He added that he doesn't see anything slowing the manufacturing rebound of the past few months other than possibly what happens with school reopenings in the coming weeks as well as the November election.

Kavita Kumar • 612-673-4113