Amid prosperity, worries always abound

Jeff Fox
What's going on

A couple of recent snapshots of the Midwest economy fall in line with the national narrative: Prices for many things are up, workers are hard to find, supply-chains are moving slowly – and the economy is expected to keep steaming right on ahead in the months to come. 

Jeff Fox

The business conditions index conducted by the Economic Forecasting Group at Creighton University, in a report posted Monday, was at 65.2 on a scale of zero to 100. That means corporate purchasing managers surveyed by Creighton in Missouri and eight other states in the central part of the country expected strong growth in the months ahead. 

Some specifics: 

• Employment in manufacturing in Missouri has grown 2 percent over the last year, and wages here are up 0.6 percent. Both of those are near the bottom among the nine states in the survey. Across all nine states, manufacturing employment is up 3.3 percent and hourly wages are up 3.9 percent. 

• “Approximately one-third of supply managers reported that hoarding, or stockpiling, of inventories has contributed significantly to supply chain bottlenecks,” Creighton reports. 

• The Creighton report, which uses the same measures and methodologies as the Institute for Supply Management does at the national level, has been around for more than 25 years and is now tracking “the highest and most consistent inflationary pressures” in all that time.  

The Federal Reserve also regularly surveys contacts in business and reports what it’s hearing. It’s most recent “Beige Book” report, last month, Nationwide, it reported “modest to moderate” growth in September, growth that was slowed “by supply chain disruptions, labor shortages, and uncertainty around the Delta variant of COVID-19.” 

It said “demand for workers was high, but labor growth was dampened by a low supply of workers. … Firms reported high turnover, as workers left for other jobs or retired. Child care issues and vaccine mandates were widely cited as contributing to the problem, along with COVID-related absences.” 

The Federal Reserve Bank of Kansas City, looking at all or parts of seven states from Kansas City to Cheyenne and Santa Fe, said demand for durable goods continues to drive manufacturing growth.  

“Economic activity continued to grow at a moderate pace and was broad-based" in September, the KC Fed reports. “Ongoing growth in manufacturing alongside renewed growth in the energy sector supported the regional economy. Consumer spending at restaurants and hotels was resilient through the recent surge in COVID cases.” 

The most recent figures from the Missouri Department of Higher Education and Workforce Development also underline the tightness of the labor market. Kansas City metro area unemployment in September was 3.5 percent, compared with 5.4 percent a year earlier. Jackson County stood at 3.7 percent, down from 6.3 percent in September 2020. 

Jeff Fox is The Examiner’s editor. Reach him at 816-350-6365 or jeff.fox@examiner.net.