Midwest factories shed jobs for a fifth consecutive month in November.
The Mid-America Business Conditions Index, which is conducted by Creighton University and covers Minnesota and eight other states, rose to 46.5 from 43.8 in October, the university said Thursday. Even so, regional producers failed to rise above the critical mark of 50, which signals growth, for a fifth month.
Minnesota did not escape crushing production trends that are impacting the entire region. While the state had performed better than peer states during the past few months, the state index matched the regional one at 46.5, dropping down from 48.7 in October.
Rising inventories, falling exports and slower raw-material deliveries all hit Midwest producers last month.
November’s regional employment index fell to 41.9 in November from 44.4 in October, contributing to the U.S. Bureau of Labor Statistics’ finding that manufacturers nationwide have now lost 16,000 workers, or 1.2 percent, of their staff in 12 months.
Factory employment in Minnesota is down 0.4 percent over 12 months.
Regional supply managers “continue to experience weak-to-negative growth,” said Ernie Goss, report author and Creighton’s director of economic forecasting. “Weakness among manufacturers linked to ag, energy and international markets continues to weigh on regional economic conditions.”
The report’s nine-state territory — Minnesota, Iowa, South and North Dakota, Nebraska, Missouri, Kansas, Arkansas and Oklahoma — is heavily dependent on corn, wheat and soybean crops as well as oil. Those sectors have been clobbered by persistently low grain and oil prices and by a high U.S. dollar that makes exported goods more costly overseas.
The combination has wreaked havoc with producers for months, and Goss said he expected the regional economy to continue to underperform the national one as a result. He noted that while manufacturers continue to struggle, the region’s nonmanufacturing sector actually grew in November.
Nationally, the Institute of Supply Managers reported that producers grew to a reading of 53.2 on its index in November. That’s up from October’s 51.9. The U.S. factory employment index, though, fell 0.6 of a point during the month.
Nationwide, 11 of 18 manufacturing sectors — led by petroleum and coal products, paper and computers and electronics — reported growth in November.