Minnesota’s growth outlook dimmed a bit in August but there’s still room for economic expansion, according to a Tuesday report.
The state scored 51.9 in the Mid-America Business Conditions Index, Creighton University’s monthly survey of supply managers that looks at business conditions across the Midwest region. Values above 50 indicate economic expansion in the next three to six months. Lower scores suggest a shrinking economy.
Modest growth in August unwinds better growth prospects from earlier in the summer. The state scored a growth-neutral 50 in March and hovered there until June before jumping to 54.8 in July, buoyed by manufacturers.
A drop-off in growth last month among the state’s nondurable goods manufacturers fed into declines in August, but bright spots elsewhere in the marketplace – even in the manufacturing sector – helped counteract the slump, said Creighton economist Ernie Goss, who oversees the survey.
“Minnesota job growth in durable goods, especially metal manufacturing, offset job losses among nondurable goods producers,” Goss said in a statement, noting that he expects economic gains statewide through the end of the year despite shakiness among some manufacturers.
The state’s manufacturing growth contrasts with the nine-state region overall, which has shed nearly 9,000 manufacturing jobs since January, according to the survey. Plunging agriculture and energy commodity prices dragged the regional index score for August into negative territory at 49.6.
Bucking the trend, Minnesota manufacturers have gained more than 3,000 jobs over the past year, according to the most seasonally adjusted data released last month by the state Department of Employment and Economic Development.
Industries and areas that rely on agriculture and energy are seeing the sharpest cuts across the Midwest, Goss said.
Aside from Minnesota, the report examines Arkansas, Iowa, Kansas, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. The results are gathered into a collection of indexes, with scores ranging from zero to 100.
Each of the components of Minnesota’s index showed a sharp decline over numbers from a year ago:
- New orders were at 54.8, compared with 72.1 a year ago.
- Production or sales scored 49.3, down from 72.3 in August 2014.
- Delivery lead time landed at 56.2, a decrease from 61.1 a year earlier.
- Inventories were at 49.8, sinking from 69.2 in August 2014.
- Employment scored 54.9, compared with 59.8 a year ago.
Still, Minnesota is among just five states in the region to report positive growth for the month. But it’s not enough to counteract steep declines that point to weak – and potentially negative – growth for the nine-state swath through the fourth quarter, according to the report.