Midwest economy: a state-by-state glance

The Institute for Supply Management, formerly the Purchasing Management Association, began formally surveying its membership in 1931 to gauge business conditions.

The Creighton Economic Forecasting Group uses the same methodology as the national survey to consult supply managers and business leaders. Creighton University economics professor Ernie Goss oversees the report.

The overall index ranges between 0 and 100. A figure greater than 50 indicates an expanding economy over the next three to six months.

Here are the state-by-state results of the May survey in the Mid-America region:

- Arkansas: For the fifth straight month, the state's leading economic indicator increased. June's business conditions index, based on a survey of supply managers, rose to a still weak 41 from May's 35.2, but was up significantly from March's regional low 29.6. Components of the overall index for June were new orders at 37.1, production at 47.5, delivery lead time at 49.8, inventories at 36, and employment at 34.4. "Over the past year, Arkansas has lost more than 20,000 manufacturing jobs," Goss said. "Our survey indicates that these losses continued for June."

- Iowa: For the first time since May 2008, the business conditions index climbed above growth neutral. The index climbed to 51.2 from 48.3 in May and was up dramatically from January's record low 22.3. Components of the overall index were new orders at 55.9, production at 56.8, delivery lead time at 53.3, employment at 45, and inventories at 45.3. "Over the past year, Iowa has lost more than 27,000 manufacturing jobs," Goss said. "I expect Iowa's rising unemployment rate to moderate in the months ahead, and the state's jobless rate should top 6 percent before it stabilizes in the third quarter of 2009."

- Kansas: The overall index dipped to a regional low in June to 29.7, down from May's 30.2. Components were new orders at 22.4, production at 18.2, delivery lead time at 49.5, employment at 30.2, and inventories at 28.1. Goss said job losses have deepened in manufacturing and telecommunications companies. "However, I expect the state's rising unemployment rate to moderate in the months ahead, and should top 7.5 percent before it stabilizes in the third quarter of 2009," Goss said.

- Minnesota: For the 11th consecutive month, the overall fell below growth neutral to 43.9 from May's 42. Components were new orders at 47, production at 48.2, delivery lead time at 37.3, inventories at 40.2, and employment at 37.3. "Over the past year, Minnesota has lost more than 35,000 manufacturing jobs," Goss said. "Economic activity was particularly weak for durable or heavy manufacturing. ... I expect Minnesota's rising unemployment rate to moderate in the months ahead topping out at 8.5 percent in the third quarter of 2009."

- Missouri: The overall index climbed to its highest level since September 2008 to 49.7, up from May's 47.3. Components were new orders at 57.7, production at 54.8, delivery lead time at 51.9, inventories at 43, and employment at 41. "According to government employment data, 8,000 Missouri workers gave up their job search or otherwise left the work force over the past three months," Goss said. "As the Missouri economy improves in the months ahead, many of these workers will re-enter the work force, adding to the state's jobless rate. I expect the unemployment rate to stabilize at a seasonally adjusted rate of 9.5 percent in the third quarter of 2009."

- Nebraska: For a 10th consecutive month, the overall index remained below growth neutral, although it increased 45.7 from May's 44.3 and April's 39.8. Components were new orders at 47.6, production at 46.4, delivery lead time at 43.7, inventories at 48.6, and employment at 42.1. Goss said that as the Nebraska economy improves in the months ahead, many of the 10,000 workers who gave up their job search or otherwise left the work force over the past three months will re-enter the work force. He said that will add to the state's jobless rate. "I expect the state's unemployment rate to stabilize at a seasonally adjusted rate of 4.9 percent in the third quarter of 2009," Goss said.

- North Dakota: For the sixth straight month, North Dakota's index was below growth neutral at 45.6, up from May's 41.3. Components were new orders at 40.6, production at 46.3, delivery lead time at 59.4, inventories at 31.8, and employment at 50 - the highest in the region. "In terms of job losses, North Dakota continues to defy the recession with little or no job losses over the past several month," Goss said. "However over the past year, North Dakota has lost 2,000 manufacturing jobs, all in durable or heavy, manufacturing. ... I expect the state's unemployment rate to top out at 4.8 percent, seasonally adjusted."

- Oklahoma: For the first time since last December, Oklahoma's index expanded above growth neutral to a regional high of 53.6 - up from May's 47.3. Components were new orders at 62, production at 65.6, delivery lead time at 68.2, inventories at 52.6, and employment at 19.8. "Food producers in the state experienced an upturn for June," Goss said. "I expect Oklahoma's rising unemployment rate to moderate in the months ahead, topping out at a seasonally adjusted 7 percent in the third quarter of 2009."

- South Dakota: For the eighth straight month, South Dakota's index was below growth neutral at 43.6 from May's 38.9. Components were new orders at 55.1, production at 50.6, delivery lead time at 40.5, inventories at 27.4, and employment at 40.5. "Economic activity was weak for both durable and nondurable manufacturers," Goss said. "I expect the state's unemployment rate to stabilize at a seasonally adjusted rate of 5.5 percent in the third quarter of 2009."

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Creighton Economic Forecasting Group: http://www.outlook-economic.com