OMAHA, Nebraska — Weakness in the agriculture and energy sectors will slow the economy in nine Midwestern and Plains states this spring, according to a monthly survey of business leaders released Monday.
The region's overall economic index improved slightly to 54.8 in January from December's 54.4, but remained at a weak level. Survey organizers say any score above 50 suggests economic growth, while a lower score suggests decline.
There have already been some job cuts at businesses tied to agriculture and energy, but that shouldn't be enough to slow the whole region, said Creighton University economist Ernie Goss, who oversees the survey.
"I expect these job cuts to grow in the months ahead for states in the region. However, growth for companies outside of energy and agriculture will more than offset the declines in those sectors," Goss said.
The survey of business leaders and supply managers is compiled into a collection of indexes ranging from zero to 100. It covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The employment index dropped to 51.4 in January from December's 56.5.
"Businesses linked to agriculture and energy are laying off workers as firms outside these two sectors are expanding hiring at a healthy pace," Goss said.
The prices-paid index, which tracks the cost of raw materials and supplies, remains near its lowest level in five years but it increased in January to 54.9 from December's low of 50.8.
Goss said business leaders are fairly optimistic about the next six months because of the current low energy prices. The confidence index improved to 61.8 in January from 58.1 in December.
The other components of the January index were:
— The inventory index fell to 50 from December's 53.4.
— The export order index climbed to 57 in January from December's 52.7.
— The Import index declined to 52.8 in January from the previous month's 56.7.
— New orders improved to 58.6, from December's 54.3.
— Production or sales jumped to 60.5 in January from 49.2.
— Delivery speed of raw materials slowed to 53.4 from December's 58.9.
Creighton University economic reports: http://business.creighton.edu/economicoutlook
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