Soaring numbers in a monthly survey of business supply managers suggest that economic conditions are improving in nine Midwest and Plains states, according to a report issued Tuesday.
The Mid-America Business Conditions Index report shows the overall economic index for the region jumped to 53.1 in December from 46.5 in November. The October figure was 43.8.
“This is the second straight increase in the overall index and points to an improving regional manufacturing economy,” said Creighton University economist Ernie Goss, who oversees the survey. “I expect this to generate even healthier growth for both manufacturing and nonmanufacturing for the first half of 2017.”
Missouri’s overall index rose to a regional high of 57.1. That was 2 percentage points higher than November’s 55.1, also a regional high. “The Missouri economy ended 2016 on a very strong upward trend. Even with slightly softer growth for the first half of 2017, I expect the state to add another 22,000 jobs through June of this year for an annualized job growth of 1.5 percent, well above the state’s long-term average,” Goss said.
Economic Development Sedalia-Pettis County Executive Director Jessica Craig said business activity is particularly active in Sedalia and Pettis County because of its strong industrial base.
“We are seeing such in increase in activity from re-investment into businesses by existing companies, but also interests from companies outside the area because of the area’s industrial base and its infrastructure,” Craig said. “Not only does this area have such strong industrial infrastructure, but it’s got the workforce to support such expansion.”
Craig said that typically during an election cycle, activity tends to slow down and the area did see some of that, but now Economic Development is seeing a huge increase in activity from local companies and those expressing interest in the area. Craig said she is expecting to see that industrial growth happen during the first quarter of 2017.
Sedalia Finance Director Kelvin Shaw said city leaders continue to be optimistic of future growth based on the expansions that have happened in the past year along with positive sales tax figures.
“Generally we do seem on the radar for expansion,” Shaw said. “We remain optimistic as our sales tax figures, which are two months old, are 2 percent higher overall compared with the previous year.”
Shaw said Sedalia will be seeing substantial retail growth in the future with more retail coming to the area.
The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers said any score above 50 suggests growth in that factor, while a score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
After six consecutive months of below-growth survey readings, the regional employment gauge for December rose to its highest level since May 2016, climbing to 50.9 from 41.9 in November.
“The growth gap between regional manufacturing and nonmanufacturing appears to be closing. The key for regional manufacturing will be any changes in sales abroad driven by the value of the U.S. dollar and global economic improvements,” Goss said.
Looking ahead six months, economic optimism, as reflected by the December business confidence index, rose to 63.3 from 61.6 in November.
Supply managers bolstered their inventories in December, which survey organizers said was another sign of growing confidence in the regional economy. The inventory index, which tracks the change in the level of raw materials and supplies, jumped to 52.8 from November’s 42.8.
