(Radio Iowa) – A new survey of supply managers in Iowa and eight other Midwestern states indicates solid manufacturing growth, despite rising numbers of job losses and the highest inflation rate in four years. Creighton University economist Ernie Goss says many companies in the region are trying to get in front of looming supply troubles due to the war with Iran.
“The supply managers that we survey are buying in advance to get ahead of price increases,” Goss says, “but also to make sure to avoid any supply chain disruptions.” Gasoline prices in Iowa are averaging a dollar more per gallon than a year ago, and prices on a variety of other products are up, in many cases, due to the war. Looking ahead six months, Goss predicts a rise in energy prices along with supply chain disruptions, which will push the business confidence index even lower.
“Eighty-one-percent of the supply managers indicated that the war with Iran had pushed input prices higher, so that’s certainly not what we’d like to see,” Goss says. “We’re seeing excessive pressure on prices and that’s more than what the economy can stand without any interest rate increases.” The monthly Creighton report shows the nine-state region lost manufacturing jobs for the 10th time in the past 12 months, while Iowa, Missouri and Nebraska accounted for more than 83-percent of the manufacturing jobs lost in the past year.
“Hiring was not good in May. Overall, we’re just not seeing a lot of layoffs, but we’re not seeing a lot of hiring,” Goss says. “One out of 15 of the firms reported layoffs, while three of four firms reported normal hiring. So that’s what we’re seeing. Just not a lot of strength in the manufacturing sector.”
Goss says U-S manufacturing has lost some 80-thousand jobs in the past year, while the Midwest alone has lost 17-thousand jobs. Goss says the latest data from the U.S. Bureau of Labor Statistics indicate Iowa’s manufacturing sector shed 3,500 jobs in the past year, for a loss of 1.5% of its manufacturing base.
