OMAHA, Neb. — The economy in nine Midwest and Plains states is likely to grow in the coming months, a monthly survey predicted Thursday, even though the overall index declined for a fourth straight month.
The overall economic index for the region declined to 53.5 in July from June's 55.6, but any score above 50 suggests growth.
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.
The overall index rose slightly to 55.7 from 54.7 in June. Components were new orders at 54.4, production or sales at 60.2, delivery lead time at 51.9, inventories at 53.3, and employment at 58.8. "Durable goods manufacturers, as a result of healthy sales and new orders, are adding employees and increasing the average hours worked per week of current employees," Goss said. "Nondurable goods producers, including food processing, are experiencing slight pullbacks in economic activity."
Creighton University economist Ernie Goss, who oversees the survey, said the index it indicates the regional economy will continue to add jobs, but at a slow pace.
"Companies with ties to the U.S. farm economy and to international markets are reporting much softer business conditions," Goss said. "This will show up in the broader regional economy in the next three to six months."
The survey of business leaders and supply managers covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. It uses a collection of indexes ranging from zero to 100.
The employment index increased to 55.3 in July from 53.7 in June, but still fell well below the 59.3 seen in May and 60.7 in April.
While manufacturers tied to agriculture and international markets are cutting jobs in the region, durable goods producers and some nonmanufacturing firms continue to hire, Goss said.
Business leaders' outlook improved, too. The confidence index, which reflects expectations for the economy six months out, jumped to 56.9 in July from June's 51.1.
"The rapidly improving housing sector and the U.S. equity market boosted supply managers' economic outlook for the month," Gross said. He also said automatic federal spending cuts had little effect on business leaders' outlook.
"In the July survey, approximately 67.7 percent of supply managers indicated that the cuts have had no impact on their company to date," Goss said, down from June's 70.8 percent. "Approximately 31.3 percent in July reported only modest impacts from sequestration. Only 1 percent of businesses reported significant impacts."
The prices-paid index decreased slightly to 58 from 58.4 in June, suggesting further decline in inflationary pressure on businesses, Goss said.
The May inventory index grew to 52.7 from 51.6 in June. The export order index decreased to 50 from June's 52.9, while import index grew to 53.6 from June's 52.9.
The other components of the overall index in July were:
— New orders at 52.2, down from 57 in June.
— Production or sales at 54.2, down from June's 60.3.
— Delivery lead time increased to 53.3 from 55.4 in June.