Midwest Economy: April State-by-state Glance

The Institute for Supply Management, formerly the Purchasing Management Association, began formally surveying its membership in 1931 to gauge business conditions.

The Creighton Economic Forecasting Group uses the same methodology as the national survey to consult supply managers and business leaders. Creighton University economics professor Ernie Goss oversees the report.

The overall index ranges between 0 and 100. Growth neutral is 50, and a figure greater than 50 indicates an expanding economy over the next three to six months.

Here are the state-by-state results for April:

Arkansas: The state’s overall index slipped to 53.6 from March’s regional high of 54.9. Components of the index were new orders at 55.2, production or sales at 58.2, delivery lead time at 55.6, inventories at 49.3 and employment at 50.0. “The state’s exports have declined for 2013 and again for 2014 to $6.9 billion. The strong U.S. dollar will push 2015 exports even lower. Durable-goods manufacturers have been experiencing much stronger economic conditions than nondurable-goods producers in the state,” said Goss.

Iowa: Iowa’s overall index rose to 53.3 last month from 51.6 in March. Components of the index were new orders at 56.1, production or sales at 55.4, delivery lead time at 53.7, employment at 49.7 and inventories at 51.4. Iowa’s exports peaked at $15.1 billion in 2014. “Our survey results indicate that Iowa international sales will weaken for 2015,” Goss said, who also said he expected the stronger U.S. dollar to harm one of Iowa’s chief exports, agricultural equipment, for the rest of year. “This will slow overall state growth for the remainder of the year. Even so, I expect state economic growth to remain positive for 2015, but well below 2014’s rate,” he said.

Kansas: The state’s overall index inched up a half point to 51.2 in April from 50.7 in March. Components of the index were new orders at 53.9, production or sales at 55.6, delivery lead time at 51.6, employment at 47.8 and inventories at 47.1. Kansas’ export sales are highly volatile, Goss said, noting that they peaked in 2013 and declined in 2014. “I expect 2015 export sales to come in even weaker than 2014 sales,” he said. “Nonetheless, state growth for 2015 will remain positive, but down from that achieved in 2014 for the same period of time.”

Minnesota: The state’s overall index for April increased slightly, to 51.3 compared with 50.0 in March. Components of the index from the April survey of supply managers were new orders at 55.6, production or sales at 55.7, delivery lead time at 51.7, inventories at 47.5 and employment at 47.9. Minnesota’s export sales reached a record high of over $21.3 billion in 2014. “I expect the strong U.S. dollar and slow global growth to push Minnesota’s 2015 export growth into negative territory,” Goss said. “Even so, the state economy will continue to expand, but at a slower pace than for the same period in 2014.”

Missouri: The April overall index rose to 54.4 from 52.1 in March. Components of the index were new orders at 55.8, production or sales at 59.1, delivery lead time at 54.3, inventories at 50.0 and employment at 52.2. Missouri’s exports expanded by more than 9 percent for 2014, to $14.9 billion. But, Goss said, the strong dollar will reduce Missouri exports and state economic growth for 2015 will be below that achieved in 2014. Even so, the state slowly will add jobs this year, he said.

Nebraska: For the 17th straight month, Nebraska’s overall index remained above growth neutral 50.0. It climbed to a regional high of 54.6 last month from March’s 51.8. Components of the index were new orders at 55.2, production or sales at 59.3, delivery lead time at 55.1, inventories at 50.2 and employment at 53.4. The state’s exports rose more than 6 percent to a record high of $7.9 billion for 2014, but Goss said the strong U.S. dollar “will push 2015 export growth into negative territory even as the overall state economy grows, but at a slower pace than in 2014.”

North Dakota: North Dakota’s overall index declined to 51.6 in April from a revised 53.2 in March. Components of the overall index were new orders at 55.6, production or sales at 56.4, delivery lead time at 52.0, employment at 45.6 and inventories at 47.4. “North Dakota’s 2014 exports expanded by almost 42 percent from a year earlier to a record $5.3 billion. The downturn in energy prices, and the strong U.S. dollar, will all reduce export growth by double digits for 2015,” Goss said.

Oklahoma: The state’s overall index dropped in April, to 50.8 from 51.6 in March. Components of the index were new orders at 53.5, production or sales at 55.2, delivery lead time at 51.2, inventories at 45.6 and employment at 48.7. After reaching a record high of $6.9 billion in 2013, Oklahoma’s exports declined almost 9 percent last year. “I expect a double-digit decline in state exports for 2015 stemming from lower energy prices and a strong dollar. This will reduce 2015 growth well below that experienced in 2014,” said Goss.

South Dakota: South Dakota’s overall index jumped in April to 54.2 from 50.9 in March. Components of the overall index were new orders at 57.1, production or sales at 58.9, delivery lead time at 54.6, inventories at 49.8 and employment at 50.6. South Dakota exports for 2014 were $1.6 billion and down from record exports of $1.7 billion in 2008. Goss said he expects the strong U.S. dollar to push 2015 exports 10 percent below their 2014 levels and slow overall growth.

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Creighton Economic Forecasting Group: http: //www.outlook-economic.com