OMAHA, Neb. — A business conditions index for nine Midwestern and Plains states surged again last month, which a report released Monday said is a sign of continued improvement in regional economic conditions.
The Mid-America Business Conditions Index hit 62.1 in March, compared with 59.7 in February, the report said. The January figure was 57.3.
Twenty percent of the business supply managers who participated in the survey “reported rapidly expanding healthy economic growth in their area, while only 4 percent reported an economic downturn in their area,” said Creighton University economist Ernie Goss, who oversees the survey.
The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth in that factor. A score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Durable-goods manufacturers were expanding at almost twice the pace of nondurable-goods producers, Goss said. “Over the past 12 months, regional manufacturing employment has expanded by 1.9 percent, compared to U.S. manufacturing growth of 1.8 percent,” he said.
The March employment index slipped to 58.4 last month from 59.4 in February, but two-thirds of firms who responded to the survey indicated they would add workers for the remainder of the year.
The regional wholesale inflation index and the U.S. inflation gauge remain elevated, the report said.
“I expect this elevated inflation to begin to show up at the consumer level,” Goss said. “As a result, I expect the Federal Reserve’s interest rate setting committee to raise short-term interest rates by one-quarter of one percentage point” at its meeting May 2.
Looking ahead six months, the March Business Confidence Index, dipped to a still strong 64.3 from February’s 74.5. Goss cited good profit growth, low interest rates and a reduction of global trade tensions for maintaining business confidence.