Regional manufacturing remained weak in December

The regional manufacturing sector remained relatively weak last month amid high input costs and tariffs, according to Creighton University’s Mid-America Business Conditions Index. .The index fell below growth neutral in December for the fourth time in six months, to 47.5 from 49.5. Any reading below 50 indicates contraction. The index covers a nine-state region from Minnesota to Arkansas.Trade activity remained weak, with the new export orders index rising to 47.0 from 42.7 but staying below growth neutral for a sixth straight month. The imports index remained relatively low, with the import index increasing to 41.6 from 37.2. Federal trade data show the region exported $69 billion in manufactured goods during the first three quarters of 2025, down 5.5 percent from the same period in 2024. Business confidence improved modestly, with the six-month outlook index rising to 50.0 from 47.4 in November. However, optimism remained limited, as only one in six supply managers expect improved business conditions over the next six months. Concerns about tariffs, inflation and slowing activity continued to weigh on expectations, according to the report.The index tracking employment fell 3.6 points to 44.0 in December, its ninth straight month of being below 50 and the weakest jobs reading since the spring of 2024. Despite softer labor conditions, supply managers anticipated wages to rise 3 percent over the next year, in line with inflation.Wholesale inflation showed signs of easing. The price index held steady at 59.8, its lowest level of the year, suggesting moderating price pressures at the wholesale level. Inventory levels were largely unchanged, with the related index edging up to 50.4 from 50.1. Inventories have remained mostly flat after an early-year buildup driven by fears of higher tariffs, said Ernie Goss, director of Creighton’s Economic Forecasting Group. Other components of the December index showed new orders falling to 42.9, production inching up to 47.4, and faster delivery times, indicating fewer supply chain disruptions.