OMAHA, Neb. (AP) – Figures plunged in an October survey of supply managers in nine Midwest and Plains states, the third straight month of declines that suggest a regional economic slowdown, according to a report released Monday.
The overall Mid-American Business Conditions Index dropped to 41.9 last month, compared with 47.7 in September and 49.6 in August.
Creighton University economist Ernie Goss, who oversees the survey, again blamed the lower survey figures on the strong U.S. dollar and global economic weakness.
“At the national level, prices at the wholesale level declined by 12.1 percent for farm products and by 25.5 percent for energy prices. This weakness has been showing up in our surveys over the last three months,” Goss said.
The wholesale inflation index for October fell to 45.3, its lowest level since May 2009, and down from September’s 46.8.
“As regional growth has slowed, so have inflationary pressures at the wholesale level,” Goss said. “I expect weaker inflationary pressures and growth to push the Federal Reserve to delay a rate hike until 2016,” he said.
The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests economic growth. A score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Economic optimism, as reflected by the business confidence index, dropped to 42.3 from 43.4 in September.
“Falling agriculture and energy commodity prices, along with global economic uncertainty, pushed supply managers’ expectations of future economic conditions lower for the month,” Goss said.
The index for new export orders also plummeted, hitting 38.2 last month, compared with 42.4 in September.
“The strong U.S. dollar, making U.S. goods less competitively priced abroad, and a weaker global economy, battered new export orders for the month,” Goss said.