Jeff Fox: Mixed picture for area and regional economy
Some quick snapshots in and around the metro area and beyond suggest a mixed bag at the moment:
• The Creighton University Mid-America Business Conditions Index continues to project economic growth in the months ahead. Creighton surveys purchasing managers at companies in Missouri and eight other states from Arkansas to the Dakotas.
Its September index, released Oct. 1, was at 65 on a scale of 100. That’s the highest in two years and solid recovery from the sharp drop in business sentiment last spring as the pandemic took root. Any figure above 50 indicates purchasing managers see growth coming for the next few months.
Creighton says the survey shows high business confidence but also supply bottlenecks and – as always – trouble finding qualified workers. Four of five supply managers said their companies were facing that problem.
The picture is brighter in Missouri, with a Business Conditions Index of 74.4. Sentiment about the five measured factors – new orders, production, delivery lead time, inventories and employment – were all well into positive territory. Creighton says the data show that unemployment peaked in Missouri in the third week of May at 9.5 percent and dropped to 3.2 percent by the first week of September.
• The Kansas City metro area (both sides of the state line) has lost jobs overall in the last year, according to the U.S. Bureau of Labor Statistics. Nonfarm employment was 1.05 million in August, down 46,300 from a year earlier.
The most losses, 23,100 jobs, were in leisure and hospitality. Professional and business services were down 10,500 jobs. Education and health services (5,500 jobs), financial activities (5,300) and even manufacturing (3,300) also fell.
• We continue to pay not so much for gas. AAA said Monday the average price of a gallon of gas in Kansas City was $1.94, and it was $1.89 statewide. That latter price is down 47 cents from a year ago.
Missouri, with the fourth cheapest gas of any state, has been below $2 for 200 days, the longest such stretch since 2005. According to AAA, analysts say you can blame or thank COVID, and that prices could fall further this fall, assuming no market disruptions.
• The state of Missouri says its tax revenues are up sharply for the first quarter of the fiscal year, that is, from July 1 to Sept. 30.
The state says general revenue collections were $3.09 billion, up 33.8 percent. That was largely driven by a 46.9 percent jump in income taxes paid, $2.35 billion. Sales taxes and corporate income taxes, which account for much of state revenues, also are up for the first three months of the fiscal year.
• The most recent regional survey by the Federal Reserve indicates moderate improvement in the Plains and Prairies part of the country, though it’s a mixed bag.
The Kansas City Fed, looking at an area from western Missouri to Wyoming and northeast New Mexico, reported in early September that “the economy expanded moderately, but activity in many sectors still remained below pre-pandemic levels.”
The 12 Federal Reserve Banks across the country survey businesses for regular broad-brush updates that reflect sentiment more than data, but it’s an attempt to figure out what people on the ground are thinking. What the KC Fed finds is that retailers are hopeful, but those in restaurants and tourism are less so.
Manufacturing remains lower than it was a year ago but is expected to keep picking up. Residential real estate is doing well, but commercial real estate isn’t.
Farmers are still hurting, and “the deterioration in farm income accelerated” in the second half of the summer.
And this persistent concern: “Respondents were split regarding labor shortages, with many reporting a need for truck drivers, mechanics, and restaurant workers.”
Jeff Fox is The Examiner’s editor. Reach him at firstname.lastname@example.org or on Twitter @FoxEJC.