April economic report suggests slow growth ahead in Midwest
OMAHA, Neb. (AP) -- An April survey of supply managers suggests that slow economic growth remains ahead for nine Midwestern and Plains states, with a sagging energy sector acting as a brake, according to a report released Friday.
"Firms linked to energy and agriculture are experiencing pullbacks in economic activity," said Creighton University economist Ernie Goss, who oversees the survey that comprises the Mid-America Business Conditions Index. "Growth in Oklahoma and North Dakota, two energy-producing states, is approximately one-third to one-half of what it was one year ago. That growth is likely to move even lower in the months ahead as the strong U.S. dollar slows growth even more," he said.
But looking ahead six months, economic optimism, as reflected in the confidence portion of the index, rose to 61.5 from March's 55.7.
"Improving economic expectations from nonenergy firms, resulting from lower energy prices, more than offset economic pessimism stemming from weakness in firms directly tied to energy," Goss said.
The overall survey index rose to 52.7 last month from 51.4 in March, the report said.
The survey results from supply managers are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests economic growth, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The rising value of the U.S. dollar continues to affect companies that sell or buy on overseas markets, the report said. The new export orders index slid to 53.5 from 56.4 in March, and the import index for April fell to 46.8 from March's 53.5.
"Over the past six months, the value of the U.S. dollar has risen dramatically against the currencies of our chief trading partners," Goss said, which has made U.S. goods less competitively priced abroad and foreign goods cheaper in the U.S.
"Regional exports for 2014 were approximately $90.5 billion," he said. "The strong U.S. dollar is likely push 2015 exports down by as much as 10 percent below 2014 levels."