OMAHA — A Creighton University index used to gauge the economic health of nine state regions, including Nebraska, fell below neutral growth for the first time in 30 months.
Ernie Goss, director of Creighton’s economic forecasting group, said this sent a “blinking recession warning” into the first half of 2023.
Nebraska down overall
Each month, the forecasting group updates its Central America Business Conditions Index, which is based on survey responses from supply managers from Minnesota to Arkansas.
Results released Thursday showed the headline index, or business barometer, fell to 48 in November from 53 in October. On a scale of 0 to 100, 50 being growth neutral.
Specific to Nebraska, the state’s overall reading was below growth-neutral for the third straight month, falling from 43.2 in October to 42.8 in November.
In Nebraska, the index’s components included: production or sales, with a score of 45.9; inventories, 39.7; employment, 31.7; and new orders, 46.9.
Regionally, manufacturing was weak, pointing to a possible recession, Goss said.
“Lifts its ugly head”
Across the nine states, the latest overall index was the lowest since May 2020, when the COVID-19 pandemic began, he said.
“We asked about the biggest threat for the rest of 2022 and 2023, and number one. So far, 1 is higher input prices,” Goss said. “According to supply managers, inflation is still on the rise.”
Supply managers also expressed concerns about a recession, supply chain disruptions, rising interest rates and labor shortages. In fact, 65% of companies report a shortage of applicants for open positions.
The survey has not recorded two consecutive months of job losses — as a region — since the early months of the pandemic in June and July 2020.
Goss said, however, that looking at state-by-state employment data shows that employment figures are back to pre-pandemic levels in four of the nine states, including Nebraska.
(Other countries with higher non-farm employment compared to pre-COVID are Arkansas, Missouri and South Dakota. )
Confidence rises slightly
Private-sector wages in Nebraska have grown 4.1 percent over the past year, while manufacturing wages have risen 6.2 percent, he said, according to the Bureau of Labor Statistics.
The survey results showed a slight rebound in economic optimism, with the business confidence index rising to 25 now from 18.5 in October. Goss said he thought the numbers were still weak.
“Confidence readings below growth-neutral in every month of 2022, worst string of readings since 2008-09 recession” He says.
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