Arkansas business conditions index rises in June

The broad Creighton University Mid-America Business Conditions Index ticked higher in June despite a rising number of manufacturing job losses, higher prices, and negative impacts from Trump Administration tariff policies.

The index, a leading economic indicator for a nine-state region stretching from Minnesota to Arkansas, was 56 in June, up from 54.4 in May. Any index rank above 50 represents growth. The June number marked the fifth consecutive month of a gain in the conditions index.

“Creighton’s latest survey indicates that the regional manufacturing sector continues to improve, albeit slowly, with manufacturing job losses for the month and escalating wholesale inflation,” Ernie Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business, said in a statement.

Arkansas’ business index was 56.2 in June, up from 53.9 in May.

“Components from the (Arkansas) June survey of supply managers were: new orders at 58.8; production at 56.0; delivery lead time at 62.7; inventories at 53.5; and employment at 50.0,” noted the Creighton report. “The latest data from the U.S. Bureau of Labor Statistics (BLS) indicate that over the past 12 months, the state’s manufacturing sector shed 400 jobs for a loss of 0.3% of its manufacturing base.”

Following are other notes in the report.
• Regional food processing firms shed 8,000 jobs, approximately 3.4% of the industry’s employment base over the past 12 months. Nebraska accounted for 48.9% of regional food processing job losses over the period.

• Due to significant food processing job losses, Missouri and Nebraska accounted for almost 68% of regional manufacturing job losses.

• More than one-third of supply managers indicated that their firm was passing along 100% of costs hikes from tariffs and the Iranian War to their customers.

• Retaliation from higher U.S. tariffs and trade restrictions pushed the new export orders below growth neutral for the last 10 months. The new export orders index decreased to 47.3 from 47.4 in May.

• As a result of supply bottlenecks and higher input prices, supply managers have pulled back on purchasing from abroad in the last 12 months. The May import index fell to 44.1 from 45.9 in May.

The Creighton Economic Forecasting Group has conducted the monthly survey of supply managers in nine states since 1994 to produce leading economic indicators of the mid-America economy. States included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.