Midwest business survey finds healthy, improving growth ahead

A survey of supply managers at Midwest businesses found that four of 10 firms are expecting an upturn in hiring for the rest of 2014.

The Mid-America Business Conditions Index for May, conducted by Creighton University's Heider College of Business, points to healthy and improving growth in the next three to six months.

The overall Business Conditions Index, which ranges between 0 and 100, rose to 60.5 from 60.4 in April.

'This is the highest overall reading that we have recorded in more than three years,” said Ernie Goss, director of Creighton's Economic Forecasting Group. 'Strong growth in new orders over the past two months was the prime factor pushing the overall index higher.

'The fulfillment of these orders in the months ahead will strengthen regional economic growth over the next three to six months.”

The employment index surged to 60, its highest level in more than a year, and up from April's 54.2.

'Both durable and nondurable goods manufacturers are adding jobs at a healthy pace,” he said. 'Even with post-recession expansions, regional manufacturing employment is down by almost 10 percent from pre-recession levels.

'Until recently manufacturers had increased output primarily by expanding employees' hours and rising productivity. However, manufacturing employers are currently adding jobs at a healthy pace.”

Iowa's Business Conditions Index for May slipped to 66.5 from April's 67.2. Components of the index from the monthly survey of supply managers were new orders at 74.7, production or sales at 75.1, delivery lead time at 50.8, employment at 69.6, and inventories at 62.6.

'Despite healthy growth in the Iowa manufacturing sector, the state's manufacturers are employing about 6.1 percent fewer workers today than before the beginning of the national recession,” Goss said. 'On the other hand, the manufacturing wage rate has expanded by a solid 4.4 percent from a year ago.”