Survey shows sluggish Midwest, Plains economy

OMAHA, Neb. (AP) -- An August economic survey in nine Midwest and Plains states suggests slow to no growth in the region but no return to recession, according to a survey report released Thursday.

The Business Conditions Index for the Mid-America region dropped to 52 in August from 54.1 in July, the report said.

Creighton University economist Ernie Goss, who oversees the report, said August was the 21st month in a row that the index had come in above neutral growth. But, he said, the August reading was the lowest since December 2009 "and clearly indicates that regional growth is waning with an increasing likelihood of a recession."

However, Goss' report said, "at this time our gauge is signaling slow to no growth, not a recession."

The survey of supply managers and executives uses a collection of indexes ranging from zero to 100. Survey organizers say that any score above 50 suggests growth while a score below 50 suggests decline for that factor. The states are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Goss said the region was being hurt by less business, consumer and local governmental spending, despite the boost provided by agriculture.

The supply managers were asked in August about their expected sales growth. Goss said about 22 percent expected a drop, 51.8 percent expected an increase and the rest expected no change for the rest of the year.

Those results were reflected by the survey's index for economic optimism. The August figure dropped to 43.4 from 49.5 in July.

"The uncertainty surrounding federal government and Federal Reserve actions have dampened the economic outlook of supply managers in the region," Goss said. "Our confidence index has now moved to levels experienced during the last recession."

The other components of the August index were:

-- new orders at 51.2, up from 50.5 in July;

-- production or sales at 54.2, up from 52.6;

-- employment at 49.0, down from 53.1;

-- trade at 54.8, up from 52.4 in July.

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Online:

Creighton Economic Forecasting Group: http://www.outlook-economic.com