TOPEKA, Kan.- Kansas business conditions decreased to 46.5 in August, down from 48.0 in July, according to the monthly Business Conditions Index compiled by Creighton University.
The index is the average of individual scores measuring new orders, production or sales, delivery lead time, employment, and inventories.
“The overall index, much like the U.S. reading, has vacillated around growth neutral since December of 2023. Additionally, supply managers remained pessimistic regarding the 2024 outlook with 35.3% of them seeing a recession as the greatest threat,” Ernie Goss, director of Creighton University’s Economic Forecasting Group said.
Regional employment has fallen below 50.0 for the past eight months, with the August employment index showing a noticeable drop to 45.2 compared to 49.7 in July.
“Business levels are holding steady. It seems everyone is waiting until after the election to make a significant move on projects,” said one supply manager in August.
“Business continues to be sluggish. The last four months have been slow,” said another.
In August, wholesale prices dropped to 56.2, down from 59.9 in July.
“This is the sixth straight month that the inflation gauge has fallen. The regional inflation yardstick has clearly declined into a range indicating inflationary pressures moving toward the Federal Reserve’s target. As a result, I expect the Fed to cut interest rates two times in the remaining months of 2024,” Goss said.
Kansas Individual Highlights
Components from the monthly survey have new orders at 49.1, production or sales at 44.2, delivery lead time at 52.5, employment at 54.6, and inventories at 32.3.
Data from the U.S. International Trade Administration shows Kansas’ manufacturing sector has experienced an 5.7% increase over the past year, and has expanded to $6.3 billion from $6.0 billion during the same time last year. Kansas is one of six states in the survey that has seen a gain in the manufacturing sector, while three states saw a loss.
Regional Trade Trending Down
The regional August Business Conditions Index shows exports continued to sink to the growth neutral for the month at 50.0 in August compared to 51.5 in July.
“According to the latest U.S. International Trade Administration data, the region’s manufacturing sector expanded 2024 year-to-date exports to $49.6 billion from $47.7 billion for the same period in 2023 for a 4.2% gain,” Goss said.
Other surveys in the trade sector show a drop in new orders to 50.0 in August from 51.1 in July. Sales index also showed a decrease of 47.2 in August from 49.3 in July. This indicates a slight expansion in delivery bottlenecks and supply chain disruptions for the month.
The Mid-America Region monthly surveys conducted by the Creighton Economic Forecasting group include Kansas, Arkansas, Iowa, Minnesota, Nebraska, North Dakota, Oklahoma, South Dakota, and Missouri.
