Manufacturers in the central U.S. finally saw lackluster exports soar and managed to grow in April, but they saw overall growth slow and failed to rally new orders and employment, according to a widely watched economics report released Monday by Creighton University.
Most states in the nine-state region reported job losses even as they experienced big jumps in export orders. But the region's manufacturers also saw factory orders, production, and inventories shrink in April. Minnesota was the lone state in the region to report any job growth during the month, but its overall results signaled economic contraction last month.
In the end, Creighton's nine state Mid-America region reported a business conditions index that slowed to a weak 50.1 index in April. That's down from the slightly stronger 50.6 in March. Minnesota's index was 49, down from 50.7 in March. Any index below 50 signals economic contraction.
Stalled hiring in factories appeared to be the key item dragging down April's Mid-America manufacturing sector, which includes Minnesota, Iowa, Nebraska, Kansas, Arkansas, Missouri, Oklahoma, South and North Dakota. The region lost 26,000 jobs over the last year, the report found.
"A somewhat weaker U.S. dollar, making U.S. goods more competitively priced abroad, contributed to stabilizing business conditions across the region. At the same time continuing weakness in the region's agriculture and energy sectors remains an obstacle to improving overall growth," said Ernie Goss, director of Creighton's Economic Forecasting Group.
He added that the region's trends were "much like the national reading [as it] has indicated the manufacturing sector is experiencing anemic, but stabilizing, business conditions."
According to a separate, national report issued Monday by the Institute of Supply Management, U.S. manufacturers saw their index fall to 50.8 in April from 51.8 in March as new orders, production and inventories fell nationwide during the month. Only 11 of 18 manufacturing sectors reported growth during the month.
Many Minnesota-based manufacturers such as 3M Co., Polaris Industries, Graco and Tennant, reported first quarter earnings results last month that showed they are still affected by unfavorable currency exchange rates and by the global slowdown of key trading partners in China, Brazil, Canada and Japan. Many noted that U.S. customers in the oil and gas industries as well as those dealing with ag equipment and mining have been hurt by industry downturns in those sectors. But even with the sobering trends, most manufacturers such as 3M held steady on their forecasts for full year 2016. They noted being "cautiously optimistic" that conditions would continue to improve worldwide.
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