The nine-state Mid-American region, which includes Iowa, is seeing its economic numbers fall for a fourth straight month, according to a Creighton University survey of supply managers and business leaders.
Creighton economist Ernie Goss says the report shows the region lost a significant number of manufacturing jobs during November.
“We’re seeing the area, the nine states, losing jobs to the tune of about 1.1% of manufacturing jobs were lost over the last year,” Goss says. “How does that compare to the U.S.? The U.S is about half that. In other words, the U.S. and the region are both losing manufacturing jobs. The Mid-American region is just losing them a lot faster.”
Data from the U.S. Bureau of Labor Statistics shows Iowa lost 1,300 manufacturing jobs over the past year. Goss says the past several surveys indicate that trend will continue into the first quarter of 2016. “Manufacturing is losing activity, shedding jobs, but the rest of the economy, outside of energy and farming, is doing pretty well,” Goss says.
The strong U.S. dollar and global economic weakness are having a significant, negative impact on manufacturers — and businesses linked to manufacturing — across the region. Goss says that weakness has been showing up in the surveys over the past four months, but has yet to spill over into the broader regional economy.
“The value of the dollar has just strengthened, strengthened, strengthened and that slows, slows, slows manufacturing, it slows farming as well, it slows energy as well,” Goss says. “That’s what we’re seeing. Those are the three weak areas and that’s what we’re capturing in our survey.”
As far as confidence, the survey finds economic optimism sank when looking ahead six months. Falling agriculture and energy commodity prices, along with global economic uncertainty, pushed supply managers’ expectations of future economic conditions lower for the month. Over the past 12 months, Goss says farm commodity prices dropped nearly 14 percent while energy commodity prices plunged almost 23 percent.