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Creighton University's monthly survey of supply managers in the 9-state, Mid-America region indicates the regional economy is lot stronger than it appeared a month ago.
Survey head and economist Ernie Goss says the survey's overall index jumped almost 6 points in January to 55.9, with numbers above 50 showing a growing economy.
The December index had slipped to an even 50, and Goss says it now appears that was the result of seasonal or one-time factors.
The employment index climbed above growth neutral for the first time since July, increasing 5 full points to 54.5.
Although Goss wants to wait a few more months before proclaiming a trend, he says everything points to an advancing economy this year.
That said, Goss sees several several risks factors that could derail the expansion...starting with inflation, where the prices-paid index, which tracks inflation at the wholesale level, rose almost 5-1/2 points to 67.8.
Goss says that, combined with the Federal Reserve's announcement that it will keep interest rates low at least until 2014, poses significant inflation risks. The survey shows that the supply managers are worried about that, especially energy prices.
In general, though, the supply managers are optimistic. The confidence index....how they see things 6 months from now....jumped a full 8 points to a very strong 67.2.
With imports, exports, and inventories all looking good, Goss himself is feeling a lot more optimistic than he was last month.
The Creighton survey also offers numbers for each of the 9 states individually. Nebraska's overall index remained above growth-neutral for the 15th straight month, rising half a point to a tepid 51.9.
Goss expects the number of jobs in the state to get back to pre-recession levels by this summer as manufacturers of both durable and nondurable good, especially those linked to agriculture and international markets, reported solid improvements.
South Dakota's overall index bounced back from a negative 47.7 in December to a positive 52.8 last month. Goss is still predicting somewhat slower growth for the first half of this years, with the number of jobs already back to pre-recession levels.
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