Manufacturing Supply Managers Expect Rise in Costs Amid Proposed Tariffs

Posted March 3, 2025

The February Creighton University Mid-America Business Conditions Index reports a 9.6% boost in prices is expected if tariffs are implemented.

The Business Conditions Index, which ranges between 0 and 100, increased to 52.0 from 51.1 in January. The index climbed above growth neutral for the fourth time since July 2024.

“I remain concerned about the negative impact of tariffs on the cost of imported inputs and of retaliation on U.S. manufactured exports,” Dr. Ernie Goss at Creighton University said. “On average, supply managers expect the proposed tariffs to increase the cost of imported inputs by 9.6%.”

Concerns of higher tariffs incentivized supply managers to buy early from abroad, setting a record-high import index of 68.2 from 67.5 in January, another record high at the time.

While manufacturing employment remains weak, the February employment index improved to 51.2 from January’s 51.1.

In February, Missouri ranked the highest among the nine-state region for its Business Conditions Index. While the Show-Me state registers the highest growth for February, just across state lines in Kansas, the Sunflower state ranked the lowest.

“That difference can be explained by the fact that rural areas in Missouri are less dependent on farm income than rural areas of Kansas. Furthermore, rural areas of Missouri are more linked to urban areas and are less remote. For example, very remote rural areas are experiencing issues related to closures and pullbacks in the provision of healthcare,” Goss said.

State Reports

Kansas: The Kansas Business Conditions Index for February fell to a regional low of 43.1 from January’s 49.6 . Components of the leading economic indicators from the monthly survey of supply managers for February were: new orders at 47.9; production or sales at 39.6; delivery lead time at 36.1; employment at 47.8; and inventories at 44.2. According to U.S. International Trade Administration data, Kansas expanded manufacturing exports by $438.5 million between 2023 and 2024 for a 3.6% gain.

Missouri: The state’s February Business Conditions Index rose to a regional high of 56.2 from January’s 50.2. Components of the overall index from the survey of supply managers for February were: new orders at 52.1; production or sales at 53.1; delivery lead time at 57.1; inventories at 66.5; and employment at 52.5. According to U.S. International Trade Administration data, Missouri expanded manufacturing exports by $1.3 billion between 2023 and 2024 for an 8.3% gain.