July regional survey results at a glance:
• Leading economic indicator falls for fourth time in past five months.
• Expected wage gains continue to decline for businesses in the region.
• Business confidence tumbles below growth neutral.
• Inflation still in pipeline but expected price gains decline.
OMAHA, Neb. – For the fourth time in the past five months, the Business Conditions Index for the nine-state Mid-America region fell. The index, a leading economic indicator from a monthly survey of supply managers, points to slowing regional growth for the next three to six months.
Overall index: The index which ranges between 0 and 100, slumped to 54.1 from June’s 54.9. While this is the 20th consecutive month that the index has been above growth neutral 50.0, it continues to trend downward signaling even slower growth ahead. The overall index, or Business Conditions Index, is a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time. This is the same methodology used by the national Institute for Supply Management .
“Higher energy prices, uncertainty surrounding the national economy and a weak housing sector are restraining business expansion in the Mid-America region,” Creighton University Economics Professor Ernie Goss said today.
One supply manager reflected a lot of the sentiment for the month saying, “We have exceeded sales forecasts every month (this year) until June. I expect forecasts for the rest of the year to be down somewhat.”
Oklahoma: Oklahoma’s Business Conditions Index from a monthly survey of supply managers in the state advanced to 61.9 from 54.7 in June. Components of the index for July were new orders at 57.4, production or sales at 59.8, delivery lead time at 78.4, inventories at 55.7, and employment at 58.9. “Over the past three months, despite new entrants to the work force, healthy employment growth in the state has pushed the unemployment rate down by 0.8 percent. Recent survey results point to solid job growth and a flat unemployment rate for the next three months for Oklahoma,” said Goss.