Midwest economic index sees decline in September

CEDAR RAPIDS - The Mid-America Business Conditions Index for September, an economic indicator for Iowa and an eight-state region, declined from August's healthy reading.

The Business Conditions Index, compiled by Creighton University's Economic Forecasting Group, fell to 54.3 from August's 57.2. After rising to its highest level in more than three years in June, the overall reading has hovered in a range pointing to positive, but slower, growth for the overall regional economy over the next three to six months.

'A 30 percent decline in grain prices over the past year has produced a pullback in economic activity for regional businesses linked to agriculture,” said Ernie Goss, director of Creighton's Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider Henry B. Tippie College of Business.

After falling below growth neutral in August, the employment index expanded in September to 53.5 from August's 48.7.

'Even though the index was up for the month, job growth for the region has slowed from earlier in the year,” Goss said. 'Regional job growth for the last 12 months ending in August was approximately 1.2 percent, which is down from 1.5 percent recorded in January of this year.”

Iowa's Business Conditions Index for August fell to a tepid 51.5 from 58.3 in August. It marked the third consecutive month that the reading has declined.

'Iowa's manufacturing sector, both durable and nondurable goods producers, are experiencing much slower growth than recorded earlier in the year,” Goss said. 'Weaker grain prices are spilling over into the broader state economy.

'For the 12-month period ending in August, government data show that average weekly wages in Iowa have expanded by a healthy 3.1 percent, or second highest in the region. Our surveys indicate that wage growth for Iowa will remain positive but significantly weaker for the last quarter of 2014.”