Creighton survey shows Midwest economy continuing to slow

OMAHA — The Creighton survey of Midwest purchasing managers for September shows the overall measure dropped again.

Economist Ernie Goss says they measure the status of the states on a zero to 100 scale, with 50 representing growth neutral. “It was fitting 52.7 and that’s still above growth neutral, but down from August 55.5, which is obviously stronger. This is the fifth decline in the last six months — so the manufacturing economy in the region is slowing down.

He says it is the lowest lowest number since June of 2020. Iowa’s individual state index was to 50.9 in September — down from 55.7 in August.   Goss says the same issues continue to be a drag on the economy. “Supply chain disruptions, far and above the greatest challenge 43% said supply chain disruptions. We had 43% said labor shortages,” he says.

The other concerns were  higher input costs, global recession, and the lowest reading was higher interest rates.  The regional employment is still down 0.7%.  “When you look at growth though, over the last year, the region grew at about 2.3%. Now that compares to the US number which is better. The  growth year over year for the US economy was about 4%,” Goss says. 

Goss says we’re seeing less and less inflationary pressures and he expect that to impact interest rates. ” I expect short term rates to rise by another 0.5% by year’s end. And so that’s that’s a little below expectations. I think the Fed’s gonna pull back somewhat in the November meeting,” according to Goss. “Again, I expect a half percent increase because of inflationary pressures, which are weakening or diminishing.”  

Goss says we’re still seeing a  recession. “Let’s call it stagflation, very low growth and inflationary pressures way above the Fed’s target of 2%. So I’ll call it stagflation. And that’s, of course, not good,” Goss says. “Manufacturing is stronger than the rest of the economy. Housing is where there’s a real problem right now that’s residential housing, multifamily doing okay. industrial, okay. So that’s where we’re seeing some real problems.”

Goss says gasoline prices are probably going to be move a bit higher, as the federal government gets out of the oil selling business from the emergency reserve.