A monthly survey of supply managers in Oklahoma and 8 other Midwestern states shows more regional economic growth. The Mid-America Business Conditions Index carried out by Creighton University economist Bernie Goss revealed growth for December 2017, making it 13 straight months of improvement.
However, Oklahoma’s overall index in the survey slipped slightly from November from 60.8 to 59.3 Based on the survey, anything over 50 is a sign of growth. The index reflected 69.3 for new orders, 61.4 for production and sales and employment at 57.9
“Although the inflation gauge is elevated, I would characterize the region as having a ‘goldilocks’ economy,” said Creighton University economist Ernie Goss, who oversees the survey. “That is not so hot as to push the Federal Reserve to raise interest rates at a stepped-up pace, but not so cool as to slow employment gains.”
The regional wholesale inflation gauge cooled to a still strong 71.3 from November’s 71.4, reflecting the regional inflationary pressures.
“Even though both our regional wholesale inflation index and the U.S. inflation gauge are elevated, I expect the Federal Reserve to forgo a short-term interest rate hike at the next meeting of their rate-setting committee on Feb. 1.” Goss said. But he also said he expected a quarter-point increase at the March 15 meeting.
The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
“Healthy profit growth, still low interest rates and the recently passed tax reform package pushed business confidence to its highest level since January 2011,” Goss said.
The regional jobs picture showed improvement as well, as the December employment index climbed to 57.7, compared with 53.6 in November.
“Over the past 12 months, the regional manufacturing sector has added approximately 29,000 jobs, a 2.1 percent expansion,” Goss said. “This annual regional manufacturing growth rate significantly exceeds the 1.5 percent growth for U.S. manufacturing.”