Survey: Midwest holiday sales slump expected

Holiday shoppers could be in a bah-humbug kind of mood this year, according to a survey of business leaders and managers in nine Midwest and Plains states released Monday.

Supply managers surveyed in October's Business Conditions Index for the Mid-America region expect holiday sales to decline by 1.6 percent from last year.

A normal holiday season would see a 6 percent growth in sales, said Creighton University economist Ernie Goss, who oversees the monthly survey.

The results are in line with other economists' predictions of a ho-hum holiday shopping season during a sluggish economic recovery.

The survey's overall index dropped to 51.8 from September's 56.2. The index ranges from zero to 100, and any score above 50 suggests economic growth in the next three to six months.

"This month's decline suggests that the economic recovery under way is going to be a disappointing one," Goss said. "In fact, the volatility and level of the overall index over the past several months indicates that a double-dip recession is a growing possibility. Downturns in farm income, in addition to legislative uncertainty in Washington, are having negative impacts on the regional economy."

The Mid-America survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

The survey's employment index also dipped in October, to 50 from September's 52.1.

Goss said despite a drop in unemployment rates across the region, the region's labor market "is not in good shape."

"Since October of last year, government data shows that the region has lost almost 425,000, or 3.2 percent, of its jobs," Goss said. "While our survey indicates the pace of job losses will diminish, I expect the region to continue to lose jobs."

Survey respondents remained optimistic about the next six months - although not as confident as they were in September. The confidence index dipped to a still-strong 65.4 from 73.4 in September.

The supply managers surveyed reported an increase in the cost of raw materials and supplies. The prices-paid index grew to 68.9 from September's 68.1.

The survey's trade numbers were again feeble. New export orders slipped to 49.3 from September's 54.6, while imports dropped to 50.7 from 56.

The October inventory index rose to 44.4 from September's 43.5 - the 13th straight month it has been below growth-neutral 50.

Other components of October's overall index:

- New orders decreased to 3.6, down from 64.5 in September.

- Production or sales dropped to 53.5 from 66 in September.

- And delivery lead time increased to 57.9 from September's 54.8.

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On the Net:

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