A survey of business leaders and supply managers in nine Midwest states, including Iowa, shows an economic slump over the region. Creighton University economist Ernie Goss compiles the Mid-America Business Conditions Index - which dropped to 46.5 last month, down from 50.4 in September.
A score above 50 suggests growth. “Overall, what our numbers our pointing to is slightly negative economic growth right now,” Goss said. The leading economic indicator dropped to its lowest level since May 2009.
Goss said one discouraging aspect of the survey is that supply managers expect holiday sales to grow by only two percent over last year.
“That is not good,” Goss said. “We need to see holiday sales up by five to six percent. Hopefully, (supply managers) are a bit on the pessimistic side and hopefully holiday sales come in stronger than that. Two percent is not going to be good enough to really push this economy into what we think is good growth range.” If the economy doesn’t pick up soon, Goss said we’ll enter another recession in 2013.
He believes the coming election is having a big impact on business activity. “It’s creating uncertainty and it’s making supply managers much more cautious in terms of their inventory purchases and in terms of how they see the economy,” Goss said. “All in all, it is having a chilling impact on the overall nine state regional economy.”
Goss said he expects the economy to pick up a bit after the election, regardless of who’s elected president. Goss’ monthly survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.