Regional manufacturing slow to start the year

The regional manufacturing economy improved but remained relatively muted in January, according to Creighton University’s Mid-America Business Conditions Index. .The index increased two points to 49.6, just under the score of 50 for the fourth time in the past five months. Any reading higher than 50 signals economic growth in the nine-state region from Minnesota to Arkansas. Economic optimism increased to a 12-month high of 59.3 from 50.0 in December as tariffs stabilized and falling wholesale inflation drove up confidence. January’s employment index increased to 47.2 from 44.0 the previous month, but was below 50 for the 10th straight month. The region has lost more than 330,000 manufacturing jobs or 20 percent of its manufacturing employment base over the past 25 years, according to the Bureau of Labor Statistics. The imports index fell to 38.2 from 41.6 in December. Creighton Economic Forecasting Group Director Ernie Goss said the drop shows tariffs are restraining imports, which President Donald Trump has sought through his tariff policy during the second term of his administration. The export reading fell to 45.4 from 47. The index for new orders increased to 48.8 from 42.9 in December, while the production index increased to 52.1 from 47.4 in the previous month.The regional inventory index fell to 45.5 from 50.4 in December. Goss attributed the drop to supply managers keeping lower levels of inventories after an initial surge last year due to concerns over impending tariffs. Thirty-one percent of supply managers said tariffs had caused their firm to change suppliers. The regional economy exported $76.7 billion of manufactured goods during the first 10 months of last year, down 5.2 percent from $80.9 billion during the same period in 2024. January’s price gauge remained relatively high but dropped to 58.2 from 59.8 in December. “The regional inflation yardstick has moved into a range indicating inflationary pressures are moderating at the wholesale level,” Goss said.