The latest Mid-America survey of business leaders is showing a few encouraging signs. Creighton University Economics Professor Ernie Goss says the latest survey of business leaders in the nine state Midwest region shows the economy continues to bottom out but we are moving into positive territory. “The number, while it was up from last month, I can say the numbers are getting less negative. We are still not on track for any economic recovery right now but we certainly have bottomed out and are inching up a bit each month.”
Goss says April’s number is an improvement but sometimes numbers can be deceiving.
“The overall index is still below growth neutral of 42.7. Of course, 50 is growth neutral. The employment number was below growth neutral again for the 15th time in the last 16 months so the region continues to shed jobs and I expect that to continue well into the second half of 2009.”
Goss says small businesses continue to struggle.
“Some of them are doing reasonably well but the real problem with small businesses that we survey is the inability to get credit. Even though the interest rates are low, the businesses leaders that we survey say it is difficult to get a loan from the banks even though the banks have lots of credit and lots of funds out there and the feds made credit readily to the banks, the banks aren?t making it available to the small businesses.”
Dr. Goss says that is likely to turn around when they restock inventories and we see some impact from the stimulus package and low interest rates.
Home sales remain weak but we could see positive numbers by the end of the year.
One huge concern that just occurred in the last week is how the H1N1 influenza virus will impact the economy. Dr. Goss expects travel and tourism to bottom out if we reach epidemic stages. The farm sector is already suffering as many countries have already cut pork exports from parts of the U-S.