Mid-America Business Conditions Volatile: Tariffs Impacting Prices, Says Creighton University Report
Omaha, NE – The Mid-America region is experiencing economic turbulence, according to the latest Creighton University Mid-America Business conditions Index. Released today, the report highlights volatility, rising prices, and generally weak performance in the first quarter of 2025. The index, a key indicator of the regions economic health, dipped to 51.0 in May, down from 53.3 in April,signaling a slowdown in growth.
Tariffs And Their Impact
Ernie Goss, Director Of Creighton University’s Economic forecasting Group, noted that proposed and implemented tariffs are major contributors to the economic volatility and slower growth. Approximately one-third of manufacturers have already switched input providers as a direct result of these tariffs or the threat thereof. “The Creighton survey is recording significant volatility, much like other regional economic measures,” Goss stated.
More Than Half Of supply Managers Indicated that Tariffs Have Pushed Prices Higher For Production Inputs. One survey respondent commented, “Tariffs are being used as a means to increase prices, regardless of whether they are applicable or not.”
Key Highlights From The May Report
- Tariff Impact: About 33% of manufacturers have switched input providers due to tariffs.
- Price Increases: Over half of supply managers report that tariffs have increased production input costs.
- Expert Opinion: One Supply Manager Claimed, “Tariffs Are Being Used As A Means To Increase Prices, Regardless Of Whether They are Applicable Or Not.”
- Interest Rate Cut: Goss Anticipates A Short-Term Interest Rate Cut At The Federal Reserve’s june 17-18 Meetings.
- Employment: The Regional Manufacturing Employment Index Remained Below Growth Neutral.
- Export Decline: The Regional Economy Exported $23.4 Billion In Manufactured Goods In Q1 2025, A 1.4% Decline From $23.7 Billion In Q1 2024.
What Supply Managers Are Saying
The Survey Also Collected Candid Comments From Supply Managers, Reflecting A Range Of Concerns And Perspectives:
- “I Understand The Significance Of The Tariffs… However, the Approach Was Abysmal And Ultimately Will Hurt The American Working Class.”
- “We Have Noticed Some Increased Prices And Are Tracking As Much As possible To Understand What Categories Are Most Affected…”
- “Highly Risky Times, Not For the Faint of Heart. These are The Times That Try Men’s Souls.”
- “Price Increases Are Starting To Occur Across The Board. It Is just A Matter Of Time Until The Consumer Will Be Impacted.”
- “The Trump Management Has Done An Admirable job Keeping inflation, Prices And Interest Rates Down…”
Employment Trends
The May Employment Index Showed A Slight Increase To 49.4 From 44.9 In April, But Still Indicates Weakness. As Goss Explained, “First Quarter Employment Was pushed Higher Due To Higher Production, In Anticipation Of The Fallout From Tariffs… Representing A Return To Manufacturing Job Losses In The Region.”
Government Data Confirms this Trend, Showing The Region Shedding 12,500 Manufacturing Jobs (-0.8%) In The Last 12 Months,Mirroring A National Loss Of 82,000 Jobs (-0.6%).
Wholesale Price Pressures
The May Price Gauge Climbed To 67.4 From 65.0 In April, Signaling Rising Inflationary Pressures At The Wholesale Level. “The Regional Inflation Yardstick Has Moved Into A Range Indicating That Inflationary Pressures Are Moving Higher At The Wholesale Level,” Goss Remarked.
Around 56.5% of supply managers reported that tariffs have driven up the cost of production inputs. Despite this, Goss still expects the Fed to cut interest rates at its next meetings.
Business Confidence And Inventories
Looking Ahead Six Months, Economic Optimism, As Measured By The Business Confidence Index, Increased To 43.2 From 35.3 In April.
However, Goss Cautions That “Due To Concerns Regarding global Economic Tensions And Rising Tariffs, Only One In Five Supply Managers Expect Improving Business Conditions Over The Next Six Months.”
The Regional Inventory Index Fell to 51.6 From 56.7,Suggesting That Firms Expanded Inventories For Four Of The First five Months Of 2025 In Anticipation Of Tariffs.
Trade dynamics
Recent Uncertainty Regarding Tariffs And Trade Restrictions Pushed New export Orders Lower In May, Slumping To 44.8 From 46.2 In April. Concurrently, Imports Showed A Slight Rebound, Rising From A Record Low To 29.8, After Supply Managers Pulled Back On Purchasing From Abroad.
Data Shows That The Regional Economy Exported $23.7 Billion In Manufactured Goods For The First Quarter Of 2025, Compared To $23.4 Billion For The Same Period In 2024, Marking A 1.4% Decline.
State-Level Insights: iowa
Iowa’s Business Conditions Index For May Declined To 49.9 From 53 In April.Key Components Included New Orders At 50.2, Production/Sales At 47.6, Delivery Lead Time At 53.2, Employment At 48.1, And Inventories At 50.4.
The Iowa Manufacturing Sector Exported $3.4 Billion In Goods For Q1 2025, An 8.6% Decline From $4 Billion In Q1 2024.
Regional Economic Indicators
Other Survey Results Indicate Declines In Key Areas:
- New Orders: Declined To 51.0 From 52.9.
- Production/Sales: Sank To 49.4 From 55.4.
- Speed of Deliveries: Fell To 53.7 From 56.8, Indicating Fewer Supply Chain Disruptions.
Mid-America Business Conditions
Since 1994, The Creighton Economic Forecasting Group’s Monthly Survey Of Supply Managers Has Provided Crucial Economic Indicators For The Mid-America Economy, Encompassing Nine States: Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma, And South Dakota.
What Strategies Do You Think Businesses Should Adopt To Navigate These Volatile Economic Conditions? How Much Do Tariffs Affect The Local Business Where You Live?
Understanding Economic Indicators And Their Impact
Economic Indicators Are Statistics That Provide Insights into The current And Future State of An Economy. They Can Be Categorized Into Leading, Lagging, and Coincident Indicators, Each Offering A Different Perspective.
- Leading Indicators: predict Future Economic Activity (E.G.,New Orders For Durable Goods).
- Lagging Indicators: Confirm Trends already In place (E.G., Unemployment Rate).
- Coincident Indicators: Reflect Current Economic Activity (E.G., Gross Domestic Product).
Strategies For Businesses In A Volatile Market
In An Habitat Marked By Tariffs And Economic Uncertainty, Businesses Can Employ Several Strategies To Enhance Resilience:
- Diversification: Expand Into New Markets To Reduce Dependence On Any Single Region.
- Efficiency Improvements: Streamline Operations To Lower Costs And Improve Profit Margins.
- Innovation: Invest In Research And Development To Create Unique Products That Command Higher Prices.
Comparative Table of Economic Indicators
| Indicator | May 2025 | April 2025 | Significance |
|---|---|---|---|
| Business Conditions Index | 51.0 | 53.3 | Signals economic growth or contraction |
| Employment Index | 49.4 | 44.9 | reflects changes in manufacturing employment |
| Price Gauge | 67.4 | 65.0 | Indicates inflationary pressures |
| Business Confidence Index | 43.2 | 35.3 | Measures economic optimism |
| New Export Orders | 44.8 | 46.2 | Tracks export demand |
Frequently Asked Questions About Mid-America Business Conditions
- What Is The Creighton University Business Conditions Index?
It Is A Monthly Survey Of Supply Chain Managers In Nine Midwestern States, Providing A Snapshot Of Regional Economic Health.
- How Do Tariffs Impact Mid-America Businesses?
Tariffs Increase Input Costs And Cause Manufacturers To Seek Choice Suppliers, Creating volatility.
- Why Is Manufacturing Employment Declining?
The Decline Is Due To A combination Of Tariff Effects And An Overall Slowdown in Economic growth.
- What Is The Significance Of The Business Confidence Index?
It Reflects Supply Managers’ Expectations For Future Economic Conditions Over The Next Six Months.
- What strategies Can Businesses Use To Combat Economic Volatility?
diversifying supply Chains, Improving Efficiency, And Innovating Product Offerings can definitely help Mitigate Risks.
Share Your Thoughts: How Do You Think These Economic Trends Will Impact Your Community? Leave A Comment Below!
