Minnesota and other Midwest manufacturers grew during the month of January, despite rising inflation and plunging exports and confidence, according to an economic report released Friday by Creighton University.
Creighton's nine-state Mid-America Business Conditions index rose to 56 in January from 55.2 in December, rebounding to the level last seen in September. Regional confidence levels, however, fell to 53.7, the lowest level in three years.
Minnesota's index slipped to a still-strong 54.5 from December's 55.5 amid solid new orders, hiring and product sales of durable goods.
Any index above 50 signals economic expansion. However, any decreases from month to month indicate that growth is slowing.
The Mid-America survey of supply managers in nine central states found that factories enjoyed a bump in new orders, inventories and hiring but saw a slowing of overall product sales and delivery speeds.
Companies also reported that they were not able to hire as many workers as desired and wrestled with spiking wholesale prices, fewer exports and sinking confidence levels. Since new trade tariffs were implemented by President Donald Trump's administration, companies noted that raw-material costs have jumped. Steel prices alone spiked 19 percent in 12 months, the report said.
"The regional economy continues to expand at a positive pace. However, as in recent months, shortages of skilled workers and international trade tension/tariffs remain an impediment to even stronger growth," said Ernie Goss, director of Creighton's Economic Forecasting Group.
Trade delivered mixed results in January. Indexes for imports rose, while exports contracted to an index of 48.3.
The Creighton report tracks manufacturing growth in Minnesota, the Dakotas, Iowa, Nebraska, Missouri, Kansas, Arkansas and Oklahoma.
Creighton's findings mirrored many trends seen nationally.
In a separate report also issued Friday, the Institute for Supply Management (ISM) said the national producers' index rose to 56.6 in January from 54.3 in December amid sizable upticks in new orders and total sales. Producers also reported growth, but slowing growth, in hiring and deliveries. At the same time inventories rose and prices fell, largely due to the impact of lower oil prices. It was the first time prices fell in three years.
"Prices contracted for the first time since the first quarter of 2016," said Timothy Fiore, chairman of the ISM Manufacturing Business Survey Committee. "The manufacturing sector continues to expand, reversing December's weak expansion, but inputs and prices indicate fundamental changes in supply chain constraints."
Fourteen of the nation's 18 manufacturing industries grew in January, led by textiles, computers and electronics and plastics.