OMAHA, Neb. — Figures from a survey of supply managers in nine states including Arkansas rose last month, suggesting economic growth ahead, according to a report released Wednesday.
The Mid-American Business Conditions index hit 52.1 in May, compared with 50.1 in April and 50.6 in March, the report said. The index generally has been on the rise since dropping to a 12-month low of 39.6 in December.
"The region's manufacturing sector is expanding but at a slow pace as gains for nondurable-goods producers more than offset continuing losses for regional durable-goods manufacturers," said Creighton University economist Ernie Goss, who oversees the survey.
The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests economic growth, below 50 suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Regional economic optimism for the next six months, as reflected by the May business confidence index, slipped to 47.7 from April's 51.3.
"One of the keys to the level of economic growth in the months ahead will be the interest rate position of the Federal Reserve," Goss said. "If the Federal Reserve telegraphs more aggressive rate hikes in the months ahead at its June meetings, the U.S. dollar is very likely to strengthen, thus slowing regional manufacturing."
The index for new export orders fell to 52.1 from 57.6 in April, and the import index tumbled in May to 50.1 from 58.0 in April.
"Recent economic improvements among the region's key trading partners assisted exports for the month," Goss said. "At the same time, growth in regional manufacturing pushed supply managers to maintain buying from abroad."
Arkansas results
The state's overall index rose in May to 52.7 from April's 49.5. Components of the index were new orders at 50.1, production or sales at 52.3, delivery lead time at 53.0, inventories at 56.3, and employment at 52.0. "A 19 percent decline in exports over the past two years contributed to the state's recent slower economic growth," said Goss.