NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — After climbing above growth neutral for December and January, the Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, slumped below the 50.0 growth neutral threshold for February.
"The manufacturing sector is just moving sideways to a bit down," said economist Ernie Goss. "The inflation numbers coming out from the Bureau of Labor Statistics was also not good, showing more inflationary pressure, which means we're going to be stuck with higher interest rates a bit longer than most investors and most economists expected."
Trade numbers were very weak for the month with new export orders sinking to 23.9 from January’s 35.8.
"Trading, particularly in Asia, and also, of course, Europe, we're seeing our trading partners going through, most of them are in an economic downturn," Goss said. "That's particularly true for China, Japan, Europe, Germany is not doing well. That's being telegraphed back to this part of the country."
Manufacturers are shortening their supply chains, if possible, after COVID-19 showed how hard it can sometimes be to get raw materials.
"Some of those companies, those manufacturers, are moving back to the U.S.," Goss said. "Of course, that doesn't take place very quickly. It's taking time. We're seeing things just not as strong as we'd like to see. When it's all said and done, when we've got a little distance between 2023 and the first part of 2024, I think we'll say that manufacturing was indeed in a recession. It was not a deep recession."
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