For the 11th straight month, Minnesota business conditions were below “growth neutral” in June, according to survey results compiled by a group at Creighton University.
The state’s business conditions index for June was 43.9. The index ranges from zero to 100, and an index greater than 50 indicates that the economy will expand over the next three to six months. The state’s May index was 42 and April’s was 42.6.
Five of the nine mid-America states studied fared better than Minnesota. The business conditions indexes in Iowa, Missouri, Nebraska, North Dakota, and Oklahoma were all higher than that of Minnesota; Oklahoma’s was the highest at 53.6. The study found that Arkansas, Kansas, and South Dakota are in worse positions than Minnesota.
Data is compiled by the Omaha, Nebraska-based Creighton Economic Forecasting Group and based on a survey of supply managers in each state.
The new orders portion of Minnesota’s index was 47 and production was 48.2. The weakest components of the state’s index were delivery lead time at 37.3, inventories at 40.2, and employment at 37.3.
In May, the state’s unemployment rate reached 8.2 percent—1.2 percent lower than the national rate of 9.4 percent. The May unemployment rate represents Minnesota’s highest since May 1983, when 8.3 percent of the state’s labor force was without work.
Creighton Economics Professor and Economic Forecasting Group Director Ernie Goss said that he expects Minnesota’s unemployment rate to moderate in the coming months and to top out at 8.5 percent in the third quarter of 2009.
As for the region, economic indicators are improving from the record-lows earlier this year. Goss said that the Midwestern economy has bottomed out, but that hasn’t led to job creation. The overall index for all nine states together totaled 41.4—a slight increase over May’s 40.5 but lower than the 42.7 in April, the highest level since the beginning of the economic crisis.
“I continue to expect the mid-America economy to be out of a recession by the end of the fourth quarter of this year with job creation coming in 2010,” he said in a statement.