Thursday, June 2, 2011

Mid-America Business Index Climbs; Inflation Index Remains High

For the first time since February of this year, the Business Conditions Index, a leading economic indicator for the nine-state Mid-America region, increased. The index from a monthly survey of supply managers is pointing to positive growth for the next three to six months. As in prior months, the May survey indicated soaring inflationary pressures at the wholesale level, reports Creighton University.

The current uptick and inflationary pressures are not surprising given this is the heart of the farm belt.

 The index, a leading economic indicator that ranges between 0 and 100, advanced to 60.2 from 57.7 in April. This is the 18th consecutive month that the index has been above growth neutral 50.0.

The prices-paid index, which tracks the cost of raw materials and supplies, slipped to a still inflationary 84.9 from April’s record high 94.0. “Companies continue to report transportation surcharges for their purchases with sellers resisting price negotiations. The higher commodity prices, especially for energy products, is cutting into the profit margins of businesses that we survey each month,” Creighton University Economics Professor Ernie Goss.

States included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

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