Midwest purchasing managers survey points to 'anemic growth'

A survey of Midwestern supply managers by Creighton University is pointing to contraction of the economy for the first time in 22 months, although not in Iowa.

Creighton's Mid-America Business Conditions Index sank to 49.9 percent in October from September's 52.2 percent. The index is based on a midpoint of 50, with indicators above that point forecasting growth and indicators below forecasting contraction.

The 49.9 percent showing points to "anemic growth for the region for the next three to six months with an increasing risk of a recession," the university said in a statement released Tuesday, Nov. 1.

"It is evident that the weakness in the national economy has now hit the regional economy,” said Ernie Goss, head of Creighton University's Economic Forecasting Group.

Just over one in five purchasing managers surveyed expect a recession in 2012, the university reported.

The index is an average of indexes for new orders, production or sales, employment, inventories and delivery lead time. Its methodology mirrors the National Institute for Supply Management for its supply manager's index.

Negative outlooks were reported in the subindices for new orders, sales/production, trade, employment, consumer confidence and inventories.

The trade subindex was growth-neutral at 50, and the consumer confidence subindex rose sharply to 49.5 percent from 40.5 percent.

For Iowa, the index score slipped to 55.4 from 57.8 in September, remaining growth neutral for the 22nd consecutive month.

"Strong growth in agricultural machinery is spilling over into other sectors such as metal product manufacturing," Goss said. "Based on our survey results over the past several months, Iowa will continue to add jobs, albeit at a slow pace, in the next three to six months."

Purchasing managers in Arkansas and South Dakota were much more negative than the previous month, however only two state indexes - those for Missouri and Kansas - were in negative territory for October.