Business Leaders Asses Recession Threat

Nearly three in five business executives say they anticipate that the U.S. economy will slip into recession this year, according to a new regional survey. But for a third straight month, the Creighton University Mid-America Business Conditions Index has expanded above growth neutral.

The index, a leading economic indicator for a nine-state region that includes Missouri and Kansas, uses the identical methodology as the national Institute for Supply Management and ranges between 0 and 100, with 50.0 representing growth neutral, climbed to 54.8 from 50.8 in March. The Mid-America report is produced independently from the national ISM.

“After flashing recession warning signals between November 2022 and January 2023, Creighton’s monthly survey of manufacturing supply managers is now pointing to positive but slow growth with cooling inflationary pressures at the wholesale level,” said Ernie Goss, director of Creighton’s Economic Forecasting Group.

“While it’s too early to tell if the Federal Reserve is achieving its ‘soft landing,’ results from Creighton’s surveys over the last several months are somewhat promising on the growth and inflation fronts. However, the inflation reading, while moderating, serves as a negative signal for financial markets and the Federal Reserve’s interest rate outlook,” said Goss.

Among other highlights of the survey:

• For a third straight month, the region’s overall index climbed above growth neutral.
• The regional wholesale inflation gauge points to waning inflationary pressures.
• For a third consecutive month, the region’s employment gauge moved into a slow growth range.
• Trade numbers, both imports and exports, have been weak for all of 2023.