Midwest economy positive, growth slowing

A leading economic indicator for Iowa and eight other Midwestern states slumped in October from September's solid reading.

The MidAmerica Business Conditions Index fell to 51.8 from September's 54, according to Creighton University's Economic Forecasting Group, which compiles the regional index monthly.

'Sharp declines in grain and crude petroleum prices drove the overall index down for the month,” said Ernie Goss, director of the Economic Forecasting Group. 'Even with the pullback, economic growth is expected to be positive, but somewhat slower in the next several months.”

For the second time in the past three months, the employment index moved below the growth neutral threshold of 50. The job gauge fell to 43.1 from September's much stronger 53.5 and August's 48.7.

"Businesses tied to agriculture and energy are experiencing weaker economic conditions,” Goss said. 'At the same time, businesses seeking to hire skilled workers are reporting a lack of qualified applicants.”

The new export orders index declined to 48.8 from 53.2 in September. The import index for October increased to 52.9 from September's 52.8.

'The significant increase in the value of the dollar this year has made U.S. goods less competitively priced abroad and increased the attractiveness of foreign goods sold in the U.S.,” Goss said. 'Combined with slower global growth, I expect our export reading to soften even more in the months ahead.”

Iowa's Business Conditions Index for October fell to 51.4 from 51.5 in September - the fourth consecutive month that the reading has declined. Components of the index from the monthly survey of supply managers were new orders at 46, production or sales at 46.6, delivery lead time at 65.6, employment at 54.2 and inventories at 43.5.

'Durable goods producers, including agriculture equipment producers and nondurable goods manufacturers, especially food processors, reported much slower growth than recorded earlier in the year,” Goss said.