Midwest business conditions deteriorate

A monthly survey of business conditions in the Midwest showed continued deterioration in July due to weakness in the agricultural and energy sectors.

Creighton University's Mid-America Business Conditions Index for July declined to 50.6 from June's 53.0. The regional index, much like the national reading, is pointing to weak growth through the third quarter of 2015.

Ernie Goss, director of Creighton University's Economic Forecasting Group, said in a news release that durable and nondurable goods manufacturers, as well as value-added service industries in the region, are experiencing very little growth.

'Businesses tied to agriculture and energy continue to report pullbacks in economic activity and this is spilling over into the broader regional economy,” Goss said.

The regional employment gauge improved for the month but remains at a level pointing to slow to no new hiring in the months ahead. The job gauge advanced to a weak 50 - or growth neutral- from June's 49.1.

'Industries and areas dependent on agriculture and energy are experiencing cuts,” Goss said. 'Metal producers and agricultural equipment manufacturers are facing job losses.”

Deere & Co. on July 23 notified about 160 employees at the John Deere Seeding plant in Moline, Ill., that they have been placed on indefinite layoff.

Looking ahead six months, economic optimism, as captured by the July business confidence index, plummeted to 52.4 from June's 59.9.

'Sinking agriculture and energy commodity prices pushed supply managers' expectations of future economic conditions lower for the month,” Goss said.

The new export orders index fell to 47.4 from 51.3 in June. The import index for July slipped to 54.7 from June's 54.8.

'Slowing global economic growth and the rising value of the U.S. dollar reduced new export orders,” Goss said. 'On the other hand, the rising value of the U.S. dollar, which makes foreign goods more competitively priced in the U.S, boosted regional imports.”

Iowa's July Business Conditions Index declined to 51.8 from 52.5 in June. Components of the index were new orders at 49.5, production or sales at 48.5, delivery lead time at 53.7, employment at 51.1, and inventories at 56.4.

'As in previous months, growth among nondurable manufacturers in Iowa, including food processors, more than offset weaker conditions among durable manufacturers,” Goss said.