Omaha, Nebraska (RI) — The monthly survey of supply managers in Iowa and eight other Midwest states finds the economy is still weakening at the state and regional levels.
Creighton University economist Ernie Goss says the lengthy report is boiled down to some key numbers on a zero-to-100 scale, where 50 is considered “growth neutral.”
Iowa’s overall number during the April survey showed a 53, but the May number dropped a little over three points, going below growth neutral. There was so much hype about the looming tariffs earlier this year that Goss says many manufacturers were able to work ahead by ordering more parts and raw materials than they’d need.
Goss says a significant number of businesses in the state and region are trying to find other places to get their supplies where perhaps the tariffs aren’t as steep.
As a result of the slowing growth, Goss predicts a cut in short-term interest rates at the Federal Reserve’s next meetings, scheduled for June 17th and 18th. In addition to Iowa, the survey also covers Arkansas, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, and South Dakota, though Goss says the less populated, agricultural states are feeling the worst impacts of tariffs.
According to data from the U.S. International Trade Administration, the Iowa manufacturing sector exported $3.4 billion in goods during the first quarter of this year, compared to $4 billion for the same period last year, a drop of eight-point-six percent.
