Mid-America Economy Signals Rising Risk of 2023 Recession

(KFOR NEWS January 3, 2023) The Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, fell below growth neutral for a second straight month.

The Business Conditions Index, which uses the identical methodology as the national Institute for Supply Management (ISM) and ranges between 0 and 100 with 50.0 representing growth neutral, sank to 47.1 from 48.0 in November.

“Creighton’s monthly survey of manufacturing supply managers is flashing recession warnings for 2023. Not since April and May of 2020, the middle of the 2020 recession, has the overall index fallen below growth neutral for two straight months,” said Ernie Goss, PhD, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.

“The overall Business Conditions Index has now declined for seven of the past nine months. Approximately 60% of supply managers expect the economy to slump into a recession in 2023,” said Goss.

December 2022 Survey Highlights:

For the first time since the early days of the pandemic in May 2020, the overall index, or business barometer, plummeted below growth neutral for a second straight month, pointing to higher recession risk for 2023.
The regional wholesale inflation gauge fell to a 32-month low.
The overall index, or business barometer, has now fallen seven of the past nine months.
Approximately 60% of supply managers expect the economy to slump into a recession in 2023.
2022 region-in-review, top-to-bottom economic performers: No. 1 South Dakota, No. 2 Minnesota, No. 3 Nebraska, No. 4 Kansas, No. 5 Oklahoma, No. 6 Iowa, No. 7 Missouri, No. 8 North Dakota and No. 9 Arkansas.
Due to labor shortages, approximately 63% of firms with job openings reported shortages of applicants.
Compared to pre-pandemic levels, the current regional labor force remains down by approximately 213,000 workers, or 1.5.