The Mid-America Business Conditions report for the month of October indicates slower economic growth and some states in the nine state region falling into negative territory. Creighton University economist Ernie Goss, “Everybody says things are ‘hunky dory’. I don’t think things are ‘hunky dory’. The overall index falls to 41.9 and that is from 47.7. This is the lowest since March of 2009. We were still in a recession in March of 2009.”
Goss says regional employment also slumped for October indicating job losses for the manufacturing and the value added services sector. The job index declined to 42.3 from September’s 42.6. Goss says almost one in five manufacturers expect layoffs in the next six months.
“Areas heavily dependent on manufacturing, especially those linked to agriculture and energy, are experiencing cuts. For example, metal producers and agricultural equipment manufacturers continue to report job losses. Almost one in five, or 18.5%, of firms expect layoffs in the next six months. This compares to 14.5% in January when we asked the same question,” said Goss. He says the strong U-S dollar and global economic weakness pushed new export orders into negative territory and that is impacting the manufacturing sector.
Nebraska’s Business Conditions Index fell below 50.0 for the fourth straight month to 40.1 in October compared to 45.4 in September. Nebraska has lost 3,200, or 3.3% of its manufacturing jobs. Survey managers indicate these losses will continue into the first quarter of 2015 with ethanol producers and food processors shedding jobs, according to Goss.