Midwest business conditions decline in July

A monthly reading of business conditions in the Midwest declined in July as regional supply managers expressed concern about the continuing downturn in the farm economy and global economic uncertainty,

The Creighton University Mid-America Business Conditions Index fell to 47.6 in July from June's 50.1. It marked the first time since January the reading has fallen below growth neutral 50.

More than one-third, or 34.3 percent, of the supply managers contacted cited global economic conditions as the greatest factor weighing on company sales and business conditions over the past year.

'More than one-fifth of businesses, or 20.9 percent, named the downturn in the farm economy as the largest factor slowing company sales and growth,” said Ernie Goss, director of Creighton University's Economic Forecasting Group, in a news release.

'The relative strength of the United States dollar, which has made regional manufactured goods less competitively priced abroad and pushed agriculture commodity prices lower, continues to slow regional manufacturing growth.”

Looking ahead six months, economic optimism, as captured by the July business confidence index, sank to 47 in July from 51.9 in June.

'Global economic uncertainty, including June's Brexit vote, was a significant economic concern for a large share of supply managers in our survey,” Goss said.

The July survey results continued to show the region's manufacturing sector is experiencing anemic to negative business conditions. Moline, Ill.-based Deere has announced the layoff of 140 production workers at its John Deere Harvester plant, bringing the total number of employees let go to more than 2,000.

Iowa's July Business Conditions Index slipped to 47.9 from June's 50.3.

'Over the last 12 months, Iowa has lost almost 7,000 manufacturing jobs with all losses recorded among durable or heavy manufacturing firms,” Goss said. 'Losses have been significant for firms linked to agriculture, such as agricultural equipment producers and metal manufacturers.

'On the other hand, food processors in the state continue to expand, according to July survey results.”