Missouri and its surrounding states are experiencing “anemic, but stabilizing and improving business conditions,” according to the Mid-America Business Conditions Index for May.
The index serves as a leading economic indicator for a nine-state region that includes Missouri. It ranges between 0 and 100, with an index above 50 indicating an expansionary economy over the next three to six months. The index factors in new orders, production or sales, employment, inventories and delivery lead time.
Missouri tops region
Missouri had the highest index of any state in the region, rising to 57.0 for May from 50.1 in April.
Missouri ranked just sixth in the region with exports per manufacturing worker of $52,000. However, it was the only state in the region to see an uptick in exports over the last two years, posting a 1.9 percent increase.
Regional index increases
The region as a whole, which stretches from Arkansas to North Dakota, was above growth neutral for a fourth straight month, and the regional index increased for the month after declines in March and April.
For the first time since August 2015, the employment gauge climbed above growth neutral. Over the past two years, regional exports in Mid-America declined by 8.1 percent, compared to a 4.7 percent loss for the U.S. economy.
More than one-fourth of businesses reported finding and hiring qualified workers remains the greatest challenge for the rest of the year.
“Job gains for nondurable goods producers more than offset losses for durable goods manufacturers for the month,” said Ernie Goss, director of Creighton University’s Economic Forecasting Group, which publishes the index.
Almost one-third, or 32.9 percent, expect U.S. economic weakness to pose the biggest challenge for business operations for the rest of 2016. More than one-fifth of businesses expect a negative impact from a June Federal Reserve rate hike.