Mid-American Economy
Mid-America Manufacturing Growth Slows with Higher Prices
Tariffs Pushing Input Prices Higher
May 2025 Survey Highlights:
• The overall Mid-America Business Conditions Index declined for the month but remained above growth neutral for the fifth straight month.
• Approximately one-third of manufacturers reported switching input providers due to tariffs, or the threat of tariffs.
• The May regional manufacturing employment index remained below growth neutral.
• More than half of supply managers reported that tariffs and impending tariffs have pushed prices higher for production inputs.
• As indicated by a supply manager in the May survey, “Tariffs are being used as a means to increase prices regardless of whether they are applicable or not.”
• As a result of slowing growth, Goss expects a cut in short-term interest rates at the Federal Reserve’s next meetings on June 17/18.
• According to U.S. International Trade Administration (ITA) data, the regional economy exported $23.4 billion in manufactured goods for the first quarter of 2025, compared to $23.7 billion for the same period in 2024, for a 1.4% decline.
OMAHA, Neb. (June 2, 2025) — The Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, moved above growth neutral of 50.0 for a fifth straight month.
Overall Index: The Business Conditions Index, which uses the identical methodology as the national Institute for Supply Management (ISM) and ranges between 0 and 100 with 50.0 representing growth neutral, declined to 51.0 from April’s higher 53.3.
“The Creighton survey is recording significant volatility, much like other regional economic measures. Proposed and implemented tariffs are producing economic volatility as well as slower growth. Approximately, 34.8% of supply reported switching suppliers due to tariffs, proposed and implemented,” said Ernie Goss, PhD, Director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.
The Mid-America report is produced independently of the national ISM.
As indicated by a supply manager in the May survey, “I understand the significance of the tariffs and perhaps they are even warranted in some cases. However, the approach was abysmal and ultimately will hurt the American working class.”
Employment: The May employment index increased to a weak 49.4 from 44.9 in April. “First quarter employment was pushed higher due to higher production in anticipation of the fallout from tariffs. Readings from the last two month represented a return to manufacturing job losses in the region,” said Goss.
U.S. Bureau of Labor Statistics data show that the region shed 12,500 (-0.8%) manufacturing jobs over the past 12 months. The U.S. lost 82,000 (-0.6%) manufacturing jobs over the same time period.
Comments from Supply Managers in May:
• “…..we have noticed some increased prices and tracking as much as possible to understand what categories are most affected and strategize future purchases.”
• “Tariffs are being used as a means to increase price regardless of whether they are applicable or not.”
• “Highly risky times Not for the faint of heart. These are the times that try men's souls.”
• “Price increases are starting to occur across the board. It is just a matter of time until the consumer will be impacted.”
• “While prices have increased, most are within the inflationary averages. Long term contracting has limited the amount of increases and are staggered to prevent significant interruptions to project budgets during any one period.”
• “The Trump administration has done an admirable job keeping inflation, prices and interest rates down and increasing re-shoring of goods and services. His "4D Chess match" with adversaries is amazing to observe as he brings integrity and the rule of law back into the global order."
• “It will be interesting to see the domino's fall as political upheaval within the Democratic party start to reveal their egregious corruption and worse, treason!”
Wholesale Prices: The May price gauge climbed to 67.4 from 65.0 in April.. “The regional inflation yardstick has moved into a range indicating that inflationary pressures are moving higher at the wholesale level. However, due to a slowing economy, I expect the Fed to cut interest rates at its next meetings on June 17/18,” said Goss.
Approximately 56.5% of supply managers reported that tariffs and impending tariffs have pushed prices higher for production inputs.
Confidence: Looking ahead six months, economic optimism, as captured by the May Business Confidence Index, increased to 43.2 from April’s 37.5. “Due to concerns regarding global economic tensions and rising tariffs, only one in five supply managers expect improving business conditions over the next six months,” said Goss.
Inventories: The regional inventory index, reflecting levels of raw materials and supplies, fell to 51.6 from April’s 56.7. “In order to front-run tariffs, firms have expanded inventories for four of the first five months of 2025,” said Goss.
Trade: Recent uncertainty regarding tariffs and trade restrictions pushed new export orders lower for May. New export orders slumped to 44.8 from 46.2 in April . As result of record imports for the first two months of 2025, supply managers pulled back on purchasing from abroad in March, April and May. The May import index rose from April’s record low of 12.5 to 29.8 for May.
According to U.S. International Trade Administration (ITA) data, the regional economy exported $23.7 billion in manufactured goods for the first quarter of 2025, compared to $23.4 billion for the same period in 2024, for a 1.4% decline. In terms of export gainers, North Dakota registered the top gain with an 8.9% addition, and South Dakota recorded the largest loss with a 17.7% reduction in the export of manufactured goods.
Other survey components of the May Business Conditions Index were: new orders declined to 51.0 from 52.9 in April; the production or sales index sank to 49.4 from 55.4 in April; and the speed of deliveries of raw materials and supplies fell to 53.7 from April’s 56.8. Lower readings indicate falling supply chain disruptions or delays.
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.
Below are the state reports:
Arkansas: The state’s May Business Conditions Index decreased to 53.2 from 57.5 in April. Components from the May survey of supply managers were: new orders at 48.5 production or sales at 56.8; delivery lead time at 54.5; inventories at 54.0; and employment at 52.5. According to ITA data, the Arkansas manufacturing sector exported $1.4 billion in goods for the first quarter of 2025 compared to $1.3 billion for the same period in 2024, for a 4.8% gain.
Iowa: The state’s Business Conditions Index for May declined to 49.9 from 53.0 in April. Components of the overall May index were: new orders at 50.2; production or sales at 47.6; delivery lead time at 53.2; employment at 48.1; and inventories at 50.4. According to ITA data, the Iowa manufacturing sector exported $3.4 billion in goods for the first quarter of 2025 compared to $4.0 billion for the same period in 2024, for an 8.6% decline.
Kansas: The Kansas Business Conditions Index for May sank to 48.1 from 51.1 in April. Components of the leading economic indicators from the monthly survey of supply managers for May were: new orders at 46.8; production or sales at 49.9; delivery lead time at 52.0; employment at 44.3; and inventories at 47.3. According to ITA data, the Kansas manufacturing sector exported $2.9 billion in goods for the first quarter of 2025 compared to $3.0 billion for the same period in 2024, for a 1.8% decline.
Minnesota: The May Business Conditions Index for Minnesota declined to 52.3 from April’s 56.7. Components of the overall May index were: new orders at 50.5; production or sales at 48.6; delivery lead time at 54.7; inventories at 54.6; and employment at 53.2. According to ITA data, the Minnesota manufacturing sector exported $6.0 billion in goods for the first quarter of 2025, compared to $6.3 billion for the same period in 2024, for a 5.5% decline.
Missouri: The state’s May Business Conditions Index climbed to 53.4 from 48.1 in April. Components of the overall index from the survey of supply managers for May were: new orders at 50.7; production or sales at 49.1; delivery lead time at 55.4; inventories at 56.5; and employment at 55.4. According to ITA data, the Missouri manufacturing sector exported $4.2 billion in goods for the first quarter of 2025 compared to $3.9 billion for the same period in 2024, for a 6.5% boost.
Nebraska: For only the second time in the past 12 months, Nebraska’s overall index fell below growth neutral. The state’s May Business Conditions Index sank to 48.6 from April’s 50.1. Components of the index from the monthly survey of supply managers for May were: new orders at 50.0; production or sales at 47.1; delivery lead time at 52.3; inventories at 48.2; and employment at 45.4. According to ITA data, the Nebraska manufacturing sector exported $1.7 billion in goods for the first quarter of 2025 compared to $1.8 billion for the same period in 2024, for a 4.0% decline.
North Dakota: The state’s Business Conditions Index advanced above growth neutral for an 11th consecutive month to 50.8, which was down from April’s 52.5. Components of the overall index for May were: new orders at 50.3; production or sales at 48.0; delivery lead time at 53.7; employment at 50.0; and inventories at 52.0. According to ITA data, the North Dakota manufacturing sector exported $1.3 billion in goods for the first quarter of 2025 compared to $1.1 billion for the same period in 2024, for a 12.5% gain.
Oklahoma: The state’s Business Conditions Index for May dropped to 50.5 from April’s 56.8. Components of the overall May index were: new orders at 50.3; production or sales at 47.8; delivery lead time at 53.6; inventories at 51.5; and employment at 49.4. According to ITA data, the Oklahoma manufacturing sector exported $1.8 billion in goods for the first quarter of 2025 compared to $1.7 billion for the same period in 2024, for a 6.4% gain.
South Dakota: The May Business Conditions Index for South Dakota slumped to 48.7 from April’s 55.8. Components of the overall May index were: new orders at 50.0; production or sales at 47.1; delivery lead time at 52.4; inventories at 48.3; and employment at 45.6. According to ITA data, the South Dakota manufacturing sector exported $411.0 million in goods for the first quarter of 2025 compared to $499.1 million for the same period in 2024, for a 17.7% decline.
Survey results for the month of April will be released on July 1, 2025, the first business day of the month.
For historical data and forecasts visit our website https://www.creighton.edu/economicoutlook or https://gossandassociates.com/.
