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OMAHA, Neb. — Business leaders are optimistic the economy will begin to recover later this year in a nine-state region of the Midwest and Plains despite the ongoing impact of the coronavirus outbreak, according to a monthly survey released Monday.
The overall index for the region improved in May to 43.5 from April’s 35.1 but it remained in negative territory. The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score below 50 suggests decline. A score above 50 suggests growth.
The survey’s confidence index improved to suggest that businesses are optimistic the economy will begin to rebound within the next six months. That index improved to 56.6 in May from April’s weak 45.5 reading.
Creighton University economist Ernie Goss said the survey shows that the coronavirus outbreak has had a greater impact on businesses tied directly to the consumer and a smaller impact on manufacturers.
“This is a consumer led recession with manufacturing lagging. Nonetheless, Creighton’s survey indicates that the regional manufacturing sector is trapped in a recession,“ said Goss, who oversees the survey.
The monthly survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The employment index for the region remained in negative territory at 40 in May, but it improved significantly from April’s record low of 26.2. Goss said that before the coronavirus outbreak took hold in mid March there were only 160,170 workers in the region receiving unemployment benefits. By early May, that number soared to more than 1.3 million workers receiving unemployment.
The survey’s inflation index increased to 48.6 in May from April’s 44, but it still indicated that wholesale prices are declining.
The region’s trade numbers both fell in May. The export index dropped to a record low of 15.9 in May from April’s 19.4. The import index slipped to 36 in May from 38.7 in April.
Several other measures of economic health in the survey also suggested declines. The inventory index increased to 48.6 in May from April’s 36.9. The new order index increased to 31.7 from April’s 21. The sales index grew to 33.3 from April’s 23.3, and the index that gauges speed of deliveries of raw materials declined to 63.8 in May from 68.3 in April.
Arkansas’ overall index rose to 43.7 from April’s 35.1. Components of the index were: new orders at 32.8, production or sales at 34.1, delivery lead time at 60.9, inventories at 49.6, and employment at 41.1. Goss said the state’s unemployment rate jumped from 4.9% in March to 10.3% in April. The state lost 102,000 jobs in this period.
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