Region Manufacturing Index Show Less Inflation Pressure, More Employment Woes

Posted July 1, 2024

Creighton University released its Mid-America Business Conditions Index for June, which climbed above growth neutral while inflation cools on wholesale prices.

The Business Conditions Index, which uses the same methodology as the National Institute for Supply Management and ranges between 0 and 100 with 50.0 representing growth neutral, 51.3 for June from 48.2 in May, according to Creighton University’s June survey.

“The overall index, much like the U.S. reading, has vacillated around growth neutral since December of 2023. Additionally, supply managers remained pessimistic regarding the 2024 outlook with approximately 48% expecting a downturn in economic activity for the remainder of 2024,” Ernie Goss, Ph.D. at Creighton University said.

The region’s price gauge dropped to 61.4 from 70.8 in May, indicating cooling inflationary pressures. Goss concluded the Fed would cut interest rates at its September meetings as a result of new prices.

For six straight months, the employment gauge for the region has remained below growth neutral. The June employment index increased slightly to 44.0 from May’s 43.7.

State reports from Creighton University’s June 2024 survey:

Kansas

The Kansas Business Conditions Index for June climbed to 57.1 from May’s 51.0. Components of the leading economic indicator from the monthly survey of supply managers for June were: new orders at 48.5; production or sales at 56.6; delivery lead time at 55.9; employment at 51.6; and inventories at 68.5. According to the latest U.S. International Trade Administration data, Kansas’ manufacturing sector expanded year-to-date 2024 exports to $4.1 billion from $3.8 billion for the same period in 2023 for a 6.7% gain.

Missouri

The state’s June Business Conditions Index climbed to a regional high of 61.8 from 55.2 in May, also a regional high. Components of the overall index from the survey of supply managers for June were: new orders at 49.1; production or sales at 58.0; delivery lead time at 58.9; inventories at 84.2; and employment at 59.1. According to the latest U.S. International Trade Administration data, Missouri’s manufacturing sector expanded year-to-date 2024 exports to $5.4 billion from $4.9 billion for the same period in 2023 for a 10.3% gain.