Midwest business conditions worsen

The strong dollar and economic weakness among global trading partners continue to have a negative impact on Midwest business conditions and manufacturing employment.

The Creighton University Mid-American Business Conditions Index for December released Monday sank to 39.6 from November's 40.7. Any reading under 50 signals contraction.

'The U.S. dollar strengthened by almost 10 percent in 2015,” said Ernie Goss, director of Creighton's Economic Forecasting Group in a news release. 'This along with economic weakness among the nation's chief trading partners has squeezed, and will continue to squeeze, U.S. and regional manufacturers.”

The index's regional employment gauge plummeted for December, indicating job losses for the manufacturing and value added services sectors including warehousing.

'Over the past year, the region has lost approximately 18,000, or 1.3 percent, of its manufacturing jobs. This represents about half of all U.S. manufacturing job losses over the year,” Goss said. 'Areas and industries heavily dependent on manufacturing, especially those linked to exports, agriculture and energy, are experiencing the largest losses.”

The December Business Conditions Index for Iowa declined to 41.2 from 42.3 in November. While the food processing sector was a bright spot in 2015, agriculture equipment manufacturing was a laggard.

Deere, Kinze and other farm equipment manufactures recorded lower sales and laid off employees as farm commodity prices remained sharply lower.

The Mid-America Business Conditions Index is based on a survey of supply managers in Iowa, Arkansas, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Nationally, the Institute for Supply Management on Monday said its index of factory activity fell to 48.2 last month from 48.6 in November. The organization said the index suggests the troubles weighing on manufacturing in 2015 will likely continue into this year.