Midwest business conditions worsen

Business conditions continued to decline in Iowa and other Midwest states last month as manufacturing activity continued to slow.

The Creighton University Mid-America Business Conditions Index slumped to 40.7 in November from 41.9 in October. It marked the fourth consecutive month that the region's overall index moved below growth neutral.

'Since our survey oversamples manufacturing firms, it is not surprising that our overall index has weakened significantly for states and industries heavily dependent on agriculture and energy that are being hammered by a strong U.S. dollar,” said Ernie Goss, director of Creighton University's Institute for Economic Inquiry, in a news release.

The regional employment gauge slumped to 41.7 in November from 42.3 in October.

'Over the past year, the region has lost approximately 1.1 percent of its manufacturing jobs,” Goss said. 'This pace of job loss is roughly twice that of U.S. manufacturing, which is likewise shedding jobs.”

Looking ahead six months, economic optimism, as captured by the November business confidence index, sank to 41.2 from 42.3 in October.

'Falling agriculture and energy commodity prices, along with global economic uncertainty, pushed supply managers' expectations of future economic conditions lower for the month,” Goss said. 'Over the past 12 months, farm product prices have dropped by 13.6 percent and energy prices have fallen by 22.9 percent.”

Goss said the strong U.S. dollar is making U.S. goods less competitively priced abroad and a weaker global economy also battered new export orders for the month.

The November business conditions index for Iowa declined to 42.3 from 44.2 in October.

'U.S. Bureau of Labor Statistics data show that over the last 12 months, Iowa lost 1,300 manufacturing jobs,” Goss said. 'Our surveys of supply managers in the state indicate this trend will continue into the first quarter of 2016.”