Midwest businesses expecting slow growth

A continuing pullback in manufacturing tied to agriculture and energy is expected to continue affecting employment and general economic growth in the Midwest.

Creighton University's Mid-America Business Conditions Index for May fell to 50.4 from April's tepid 52.7. An index greater than 50 indicates an expanding economy over the course of the next three to six months..

'Firms linked to energy and agriculture are experiencing pullbacks in economic activity,” said Ernie Goss, director of Creighton University's Economic Forecasting Group in a news release.

'Job growth in Oklahoma and North Dakota, two energy-producing states, has moved into negative territory. Other states dependent on agriculture also are experiencing slower economic growth.

'That growth is likely to move even lower in the months ahead as the strong U.S. dollar slows economic activity even more.”

The regional employment gauge remained in a range indicating slightly negative to stagnant job growth for manufacturing and value-added services firms in the region. The job gauge fell to 48.3 last month from 49.2 in April.

When supply managers were asked about the hiring situation at their firms, 10 percent of reported an upturn in the number of applicants for each available job. About 9 percent indicated the shortage of qualified workers increased from last month.

Looking ahead six months, economic optimism - as captured by the May business confidence index - declined to 58.3 in May from April's 61.5.

Iowa's Business Conditions Index fell to 50.4 in May from 53.3 in April.

'Durable goods manufacturers continue to experience pullbacks in economic activity,” Goss said. 'Agricultural equipment manufacturers and metal producers are reporting downturns in economic activity.”