Creighton University’s September regional Business Conditions Index is indicating still-positive but slowing growth expectations for the next three to six months. The report, released Oct. 1, revealed that business confidence had fallen to its lowest level since March 2020.
The BCI declined in September to 61.6 from 68.9 in August. Decreases were seen in Arkansas, Iowa, Kansas, Minnesota, Nebraska, North Dakota and South Dakota, increasing only in Missouri and Oklahoma. The index ranges between 0 and 100. Any number above 50 indicates economic growth while a number below that signals economic retraction expectations. The index has remained above growth-neutral for 16 of the last 17 months. Supply managers said worker shortages represented the greatest challenge over the next 12 months and continued to restrain growth.
Nearly 73.3 percent of supply managers expect holiday and Christmas shoppers to experience much higher prices and lower inventory this season.
“The message from supply managers is to order early,” said Ernie Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister chair in regional economics in the Heider College of Business.
Supply bottlenecks slammed regional imports. Approximately one-in-three supply managers said finding and hiring qualified workers is going to be the biggest challenge over the next three-six months.
Other report findings included:
- The regional employment index remained above growth-neutral for September but fell to 56.7 from August’s 64.6. “Even with strong manufacturing job growth, the region has yet to recover all job losses from the pandemic. The latest U.S. Bureau of Labor Statistics data indicate that current regional nonfarm employment is down by 472,000 jobs, or 3.4 percent, compared to pre-Covid-19 levels,” Goss said.
- Commodity prices have increased approximately 20 percent over the last 12 months, according to the U.S. Bureau of Labor Statistics data. “Creighton’s monthly survey is tracking the highest and most consistent inflationary pressures in more than a quarter of a century of conducting the survey,” Goss said.
- Economic optimism for the next six months fell to 37, the lowest since the onset of Covid-19, and down from 53.5 in August. This was the fourth straight month that the index has declined.
- Inventories: The regional inventory index, reflecting levels of raw materials and supplies, dropped to 48.3 from 54.9 in August.
- Trade: In spite of supply chain bottlenecks, regional exports were solid in September, though declining to 59.5 from August’s 64.7. Those bottlenecks, however, pushed imports to 37 from 52.4 in August.