SD’s economic index hits regional high
OMAHA, Neb. (AP) — A monthly economic index for nine Midwestern and Plains states inched up in May, suggesting healthy economic growth is coming over the next three to six months, according to a report released Monday.
The overall Mid-America Business Conditions Index rose to 60.5 in May from 60.4 in April.
“This is the highest overall reading that we have recorded in more than three years,” said Creighton University economist Ernie Goss, who oversees the report. “Strong growth in new orders over the past two months was the prime factor pushing the overall index higher.”
The survey results from supply managers are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
In South Dakota, the state’s overall index hit a regional high of 68.9 in May, compared with April’s 68.1. Components of the overall index were new orders at 67.9, production or sales at 76.1, delivery lead time at 63.6, inventories at 65.0 and employment at 71.7. South Dakota’s manufacturing sector has about the same number of workers today as it had before the national recession began.
“Our surveys over the past several months point to solid improvements for manufacturing and the overall state economy for the next three to six months, with strong wage gains,” Goss said.
Economic optimism, as captured by the May business confidence index, dropped to a still healthy 62.5 from April’s 64.2.
“Improvements in the national and regional job market supported supply managers’ business outlook for the month,” Goss said.
After weather restrained job growth in the first quarter of 2014, Goss said, businesses expanded employment at a brisk pace for April and May.
The employment index surged to 60.0, its highest level in more than a year, compared with April’s 54.2.
“Even with post-recession expansions, regional manufacturing employment is down by almost 10 percent from pre-recession levels,” Goss said. “Until recently, manufacturers had increased output primarily via expanding hours worked for current employees and rising productivity. However, manufacturing employers are currently adding jobs at a healthy pace,” he said.
About 10.7 percent of firms in the region expect layoffs yet this year, the report said, while 41.3 percent expect to add workers. The remaining 48 percent expect little or no change in employment levels for the rest of the year.