Minnesota and other Midwest manufacturers enjoyed solid sales and production gains in March even as flooding affected nearly a quarter of surveyed factories, according to a widely watched economic report issued Monday by Creighton University.
Creighton’s nine-state Mid-America Business Conditions Index rose to 58.2 in March from 57.9 in February amid increases in new orders and production. Minnesota’s monthly index fell to 53.0, down from 53.4 in February as hiring and inventory build ups continued, but at a slower pace.
March’s nine-state index signaled the best business conditions for the region since August 2018. An index above 50 signals economic expansion. March marked the 28th consecutive month that the manufacturing conditions index remained above the critical “growth neutral” threshold.
Still, Monday’s upbeat report included notable caveats, namely that 22 percent of survey respondents said they were negatively impacted by spring floods. Creighton’s March report also found that regional inventories, employment, imports, exports and confidence levels grew in March, but at a slower pace than in February.
“The regional economy continues to expand at a positive pace. However, as in recent months, international trade tension, tariffs and the global economic slowdown remain obstacles to even stronger growth,” said Ernie Goss, director of Creighton’s Economic Forecasting Group.
March’s overall confidence index, which tracks business optimism for the next six months, slid to still robust 57.2 from February’s 58.8.
The Creighton report tracks manufacturing activity across Minnesota, Iowa, North Dakota, South Dakota, Nebraska, Kansas, Missouri, Oklahoma and Arkansas.
Monday’s regional report echoed results reported on the national level.
In a separate report, the Institute for Supply Management (ISM), said Monday that U.S. manufacturers reached an index of 55.3 in March, up from 54.2 the month before.
A rise in new orders, production and employment gains moved the needle for the nation’s factories, even as raw material costs rose and inventories and supply delivery speeds slowed during the month. Import growth was flat while exports grew but “at marginal levels” during the month, said Timothy Fiore, chairman of the ISM Manufacturing Business Survey Committee.
The ISM survey of U.S. manufacturers revealed that supply managers are concerned about weather-related delays for supply deliveries and construction, the uncertainty of Brexit, finding enough skilled workers and slowdowns starting to appear in some electronics and equipment markets.
But even with some concerns, 16 of 18 U.S. manufacturing industries grew during March, led by printing; textile mills; food, beverage and tobacco; petroleum/coal products; computer and electronic products and electrical equipment.
The Creighton and ISM reports land just weeks before manufacturers, such as 3M, Polaris Industries, and Ecolab are scheduled to release first-quarter financial results.