Survey: Midwest economy improves despite pandemic, derecho

OMAHA, Neb. (AP) — The rural economy in Middle America showed improvement in August, despite the effects of a global pandemic and a rare devastating wind storm earlier in the month, according to a monthly survey of nine Midwest and Plains states released Tuesday.

The overall index for the region jumped to 60 in August from July’s 57.4, and the region’s employment index moved above growth neutral 50 for the first time since January, coming in at 54.8 for August, compared with 48.5 in July. The survey results are compiled into a collection of indexes ranging from zero to 100. Any score above 50 suggests growth, while a score below 50 suggests decline.

Creighton University economist Ernie Goss, who oversees the survey, said four of five supply managers reported difficulty hiring qualified workers — even though the unemployment rate remains higher than before the coronavirus outbreak.

The confidence index climbed to a strong 73.3 — its highest level since February 2018 — from 68.3 in July. The confidence index measures business leaders’ expectations for the economy over the next six months.

“Since our survey was conducted after August’s derecho, I expected to record weaker business confidence,” Goss said. “However, our survey indicates that the region’s manufacturing sector was spared much of the negative impacts.”

The overall index in Iowa inched above growth neutral, climbing to 56.4 from 50.9 in July. Components of the August index were: new orders at 72.5, production. or sales at 67.7, delivery lead time at 66.5, employment at 48.0, and inventories at 43.6. “According to U.S. Bureau of Labor Statistics, since the onset of COVID-19, the state’s manufacturing sector has lost approximately 6,000 jobs, a decline of 2.7%, with transportation equipment manufacturing accounting for a large share of the losses,” Goss said.

The monthly survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.