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Regional survey shows slumping economic confidence, foresees ‘flat’ holiday activity

By: - October 3, 2022 7:03 pm

September Mid-America Business Conditions Index. Blue shows trend line for the region, which represents nine states including Nebraska. (Courtesy of Creighton University)

OMAHA — Confidence in the economy slumped again in September, fueling the worst string of optimism readings since the 2008-09 recession, according to the author of Creighton University’s Mid-America Business Conditions Index.

The monthly index report, led by Creighton economist Ernie Goss, is based on a survey of supply managers that  helps forecast economic conditions for a nine-state region stretching from Minnesota to Arkansas and including Nebraska.

Ernie Goss, professor of economics and lead researcher of regional business survey. (Courtesy of Creighton University)

September results, released Monday, indicate the region continues to add manufacturing activity but at a slower pace with declining inflationary pressures, Goss said.

 “We’re still seeing essentially a recession, let’s call it stagflation,” he said, describing that as low growth and inflationary pressures far above the Federal Reserve’s target of 2% percent for the inflation rate. 

“Manufacturing is stronger than the rest of the economy,” Goss said. “Housing is where there is a real problem right now, that’s residential housing. Multifamily is doing OK.”

For manufacturing wage growth in the past 12 months, the report ranked Nebraska No. 1 in the region, followed by South Dakota, Kansas, Missouri and Iowa. The other states in the survey are Minnesota, Oklahoma, North Dakota and Arkansas. 

Nebraskans and others in the region should look out and be prepared for higher interest rates, Goss said. 

“If you need to borrow, borrow today,” he said. “Interest rates are not going to get lower – long-term or short-term. Long-term interest rates are going to rise. We’re seeing mortgage rates tip above 7% for the first time in 15 years. “

Overall, Goss said, the September business conditions index for the region remained above growth neutral, but declined for the fifth time in the last six months and registered its lowest reading in more than two years. 

The metric that focuses on hiring showed that employment numbers for the region are still below pre-pandemic levels, but points to 2.3% growth compared to the year before. 

Supply managers were asked to identify their greatest threat for the rest of the year, and 43% said supply chain disruption was tops. Nearly 35% said labor shortages.

Based on the survey, Goss said to expect “flat” or “weak” holiday economic activity.

“What’s bringing that down is a lot of pre-buying,” he said. “In other words, a lot of companies have built up their inventories in anticipation of supply chain disruptions, so that’s what’s going to slow things down for the rest of the year.”

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Cindy Gonzalez
Cindy Gonzalez

Senior Reporter Cindy Gonzalez, an Omaha native, has more than 35 years of experience, largely at the Omaha World-Herald. Her coverage areas have included business and real estate development; regional reporting; immigration, demographics and diverse communities; and City Hall and local politics. She has won awards from organizations including Great Plains Journalism, the Society for Advancing Business Editing and Writing (SABEW) and the Associated Press. Cindy has been recognized by various nonprofits for community contributions and diversity efforts. She chairs the board that oversees the local university’s student newspaper.

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