Economic growth is still slowing in nine Midwestern and Plains states amid trade and tariff disputes, according to a monthly survey report released Wednesday.
The Mid-America Business Conditions Index declined to 57.0 in July, from 61.8 in June and 67.3 in May, the report states. It's still the 20th straight month that the index remained above 50. Survey organizers say any score above 50 suggests growth.
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"The regional economy continues to expand at a healthy pace, with manufacturing growth of approximately 2.6 percent over the past 12 months, compared to a lower 2.3 percent for the U.S.," said Creighton University economist Ernie Goss, who oversees the survey. "However, I expect expanding tariffs, trade restrictions and rising short-term interest rates from a more aggressive Federal Reserve to slow growth to a more modest but still positive pace."
The results from the survey of business supply managers are compiled into a collection of indexes ranging from zero to 100. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The slowdown is reflected in the July employment index, which dropped to 58.9 from June's 61.9.
"Overall employment growth in the region over the past 12 months has been healthy but expanding at a rate below that of the nation," Goss said. "On the other hand, manufacturing job growth has been stronger in the region than the rest of the U.S."
Almost two-thirds of the supply managers who responded said the tariffs and trade restrictions have harmed or will harm their companies. Nevertheless, the economic optimism index hit 63.9 last month, compared with 59.8 in June.
"Despite trade tensions and skirmishes, healthy profit growth, still low interest rates, and lower tax rates, supported robust business confidence," Goss said.