Citing strong exports, hiring and faster ingredient deliveries, Midwest manufacturers reported their highest growth in four months in October, according to a widely watched economic report issued Wednesday by Creighton University.
Creighton's Mid-America Business Conditions Index, which covers Minnesota and eight other central states, rose to 58.8 in October from 58.2 in September. It is the 11th consecutive month the index signaled strong economic growth for factories in the region.
Minnesota's index fell to a still strong 56.3 in October from 59.4 in September as factories reported growth across nearly all measures. Any index above 50 indicates growth.
"Over the past 12 months, Minnesota expanded both durable and nondurable goods manufacturing. Gains were strong for food processors and medical equipment manufacturers," said Ernie Goss, director of the Creighton Economic Forecasting Group.
For the nine-state region — Minnesota, the Dakotas, Iowa, Kansas, Missouri, Nebraska, Oklahoma and Arkansas — Goss found that factory employment, exports, inventories and confidence levels swelled significantly last month while new orders and sales remained strong.
The performance followed a host of recent positive earnings reports in which 3M, Polaris, Ecolab, Graco and Pentair revealed solid sales and adjusted profits that beat Wall Street expectations for the quarter ending Sept. 30.
Those gains not only drove up the stock market but also appeared to have continued into October, Goss said.
In a separate national report Wednesday, the Institute of Supply Management reported a strong growth index of 58.7 for U.S. manufacturers in October. The figure slipped slightly from September's extremely robust index of 60.8, which was the highest index since May 2004.
Jefferies LLC economist Thomas Simons noted that U.S. producers still performed "at a very high level" but experienced a slight slowing of growth for new orders, production, employment and inventories. Goss was not alarmed by the slight dip.
"Both the national and our regional indices indicate that the manufacturing sector is expanding at a very healthy pace and that this expansion will spill over into the broader national and regional economies in the next three to six months," Goss said.
The regional manufacturing surge is welcome after a dismal 2016 in which many Midwest producers found themselves hampered by the high U.S. dollar, lackluster trade, slowed growth in China and several sectors throttled by economic downturns.
Industries weathering severe slowdowns last year included oil, mining, agricultural equipment and paper.