The regional economy continues to slowly grow, according to Creighton University’s May Business Conditions Index.
The index, which tracks the sentiments of supply chain managers in nine Midwest states, fell 3.5 points to 51.3 from 54.8 in April, the fourth straight month of being above the growth-neutral score of 50. Six-month economic confidence fell to 29.6 in May from 31.9 in April as 41 percent of supply managers expect economic growth to fall in the next six months.
“After flashing recession warning signals between November 2022 and January 2023, Creighton’s monthly survey of manufacturing supply managers over the past several months is now pointing to positive but slow growth with somewhat lower inflationary pressures at the wholesale level,” 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.
The wholesale inflation gauge increased to 74 from 67.4 in April. Supply managers reported 5.6 percent average wholesale growth over the past 12 months. They expect that increase to fall to 2.9 percent for the next 12 months. Supply managers reported 5.6 percent average price growth over the past 12 months, and expect 2.9 percent growth in the next year.
The region’s index for employment remained at 52, indicating slow growth for the fourth straight month. According to the U.S. Bureau of Labor Statistics, regional manufacturing employment increased 2.5 percent over the past 12 months while average hourly wages rose 5.7 percent. The regional index reflecting levels of raw materials and supplies increased to 59.1 from 54.3 in April as manufacturing firms started returning inventory to historically average levels. “Manufacturers in the region are maintaining employment levels due to a fear of an inability to hire back once business activity levels up,” Goss said.
Goss expects the Federal Reserve Open Market Committee to pause interest rate hikes this month.