Manufacturing growth slowed in June across the Midwest as the majority of supply chain managers predicted a recession would occur in the next 12 months, according to Creighton University’s Mid-America Index.
Creighton’s business conditions index fell to its lowest level since the start of the pandemic. Nearly 69 percent of supply managers expected a recession to hit in the next 12 months. Non-farm employment remains below pre-pandemic levels in all nine states the survey covers. Economic confidence dropped four points to 17 on a 100-point scale, its lowest reading since the start of the pandemic.
Inflation remained historically high in June but dropped three points to 88. Commodity prices increased 21 percent over the last 12 months. Ernie Goss, director of Creighton’s Economic Forecasting Group and the Jack A. MacAllister chair in regional economics in the Heider College of Business, expects the Fed to increase interest rates by 0.75 percent late this month.
Supply chain managers also described strong economic conditions. More than half expect business activity for their firms to expand over the next six months. The employment index remained strong in June, increasing six points to 59.
States included in the monthly survey include Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. The business conditions index declined in every state except for Minnesota and South Dakota.