Survey: Manufacturing outlook mostly pessimistic

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Central states ranging from Minnesota to Arkansas have lost 4,900 manufacturing jobs since the start of the year, including a loss of 1,700 jobs in Oklahoma, a regional survey said.

For the fifth time in 2024, the Creighton University Mid-America Business Conditions Index, a leading economic indicator for a nine-state region, slumped below the 50.0 growth neutral threshold in September.

The Creighton index, which uses an identical methodology as the national Institute for Supply Management and ranges between 0 and 100 — with 50.0 representing growth neutral — declined to 48.1 in September from 48.7 in August. It represents the ninth time in 2024 that the index has drifted around growth neutral.

“The overall index, much like the U.S. reading, has vacillated around growth neutral since December of 2023. Additionally, supply managers remained concerned about inflationary pressures, with an average 6.2% growth in input prices expected over the next year,” said Ernie Goss, director of Creighton’s Economic Forecasting Group.

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The Mid-America report is produced independently of the national ISM.

Supply managers, asked to identify the top economic challenges over the next six months for their firm, 39.1% named higher inflation; 21.7% reported supply chain disruptions; 13.0% listed higher interest rates; 8.7% noted China trade skirmishes; and the remaining 17.5% named other issues.

Employment: After climbing to growth-neutral for December, the employment gauge has tumbled below 50.0 for the past nine months.

The September employment index sank to 44.3 from 45.2 in August. Despite falling manufacturing employment, almost 18% reported a shortage of workers in the September survey.

The survey did not indicate specific reasons for the losses in manufacturing jobs, either regionally nor locally.

U.S. Bureau of Labor Statistics data show that seasonally adjusted regional manufacturing employment fell by 4,900 jobs (0.3%) in 2024 thus far.

Oklahoma: The state’s Business Conditions Index sank to 45.7 from August’s 48.0. Components of the overall September index were: new orders at 41.5; production or sales at 37.8; delivery lead time at 54.8; inventories at 50.9; and employment at 44.7. According to the latest U.S. Bureau of Labor Statistics seasonally adjusted manufacturing data, Oklahoma lost 1,700 manufacturing jobs, or minus 1.8%, thus far in 2024.

Anonymous September comments in the Creighton University survey from supply managers included:

“Finding people to work is not difficult but keeping them busy is tough at times.”“My gut feeling is that we will continue to see manufacturing contraction, which will reduce supply input costs and somewhat reduce the tight labor market.”“Inflation is the hidden tax that has DRAMTICALLY disrupted business and personal finances.”“From a labor perspective, the USA STOPPED all programs to both teach and RESPECT hands-on labor.”“We are forecasting a flat end of year, with a potential for growth in the first and second quarter of 2025.” Goss said confidence is not high among regional supply managers.

“Looking ahead six months, economic optimism ... slumped to 26.2 (in September) from 26.7 in August,” he said.

“Approximately 62% of supply managers expect a recession or worsening business conditions over the next six months,” Goss said.

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