Creighton University’s Mid-America Business Conditions Index continues to find broad economic pessimism among supply managers from North Dakota to Arkansas. Institute for Economic Inquiry director Ernie Goss says South Dakota slipped into pessimism for the first time since November 2012:
For the first time since November of 2012, South Dakota’s leading economic indicator fell below growth neutral 50.0. The Business Conditions Index, from a monthly survey of supply managers, declined to 42.6 from 50.9 in September. Components of the overall index for October were new orders at 38.7, production or sales at 39.3, delivery lead time at 50.1, inventories at 41.8, and employment at 43.0. “U.S. Bureau of Labor Statistics data show that over the last year, South Dakota added 2,100 manufacturing jobs for a gain of 4.9 percent. Unless our survey results weaken again in the months ahead, I expect slow but positive growth for the state economy into the first quarter of 2016,” said Goss [“Mid-America Business Conditions Falls Again: Almost One of Five Manufacturers Expect Layoffs in Next Six Months,” Creighton University Institute for Economic Inquiry, 2015.11.02].
Slow but positive economic growth—South Dakota comes out better on that scale than many of the other states in the survey; IEI expects manufacturing job losses to continue in Oklahoma, North Dakota, Nebraska, Kansas, Iowa, and Arkansas.
What’s beating the region up? Dr. Goss mentions the strong U.S. dollar, a weak global economy, falling agriculture prices, and falling oil prices.
It seems those negative factors have the greatest impact if you’re plugged into the global corporate economy. Build more local enterprises meeting local needs and driving more local consumption and hiring, and you better insulate your state against such global forces. Hmm… South Dakota Department of Agriculture, are you ready to invest more in small-scale, locally oriented agriculture?