State, Regional Indicators Are Trending in the Right Direction
Photo courtesy of Greater Omaha Chamber of Commerce
The October Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Arkansas to North Dakota, climbed to a healthy reading, according to the latest monthly survey results. Creighton University was founded in Omaha, Nebraska, in 1878. The Creighton Economic Forecasting Group has conducted the monthly survey of supply managers in nine states since 1994 to produce leading economic indicators of the Mid-America economy. States included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The forecasting group’s overall index, referred to as the Business Conditions Index, ranges between 0 and 100. An index greater than 50 indicates an expansionary economy over the course of the next three to six months. The Business Conditions Index is a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time. This is the same methodology, used since 1931 by the Institute for Supply Management, formerly the National Association of Purchasing Management.
The Business Conditions Index (overall index) rose to 58.2 from August’s 57.5. This is the 10th straight month the index has remained above growth neutral, continuing to point to positive growth for the region over the next three to six months.
The Business Conditions Index is a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time.
“The overall index over the past several months indicates a healthy regional manufacturing economy, and points to solid growth for both manufacturing and nonmanufacturing for the rest of 2017,” 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.
How did the Index’s home state of Nebraska fare?
The September Business Conditions Index for Nebraska rose to 59.3 from 57.9 in August. Components of the index from the monthly survey of supply managers were new orders at 65.4, production or sales at 64.2, delivery lead time at 59.0, inventories at 54.6, and employment at 53.4. “Over the past 12 months, Nebraska increased manufacturing employment by only 0.8 percent, or approximately 800 jobs manufacturing jobs. Losses for durable goods producers were more than offset by gains for nondurable goods manufacturers,” said Goss.
Nebraska Site ‘In Line with Our Company’s Goals’
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Ontario-based Agri-Plastics plans to open its first American production facility in Sidney, Nebraska, in early 2018. The company, which manufactures calf hutches and plastic products to support North America’s dairy industry, plans to hire more than 20 employees for manufacturing and production jobs.
The Nebraska Department of Economic Development’s (DED) recruitment team began building a relationship with the company last fall while attending the World Dairy Expo in Wisconsin, which draws nearly 850 companies to its annual trade show. When Agri-Plastics later expressed interest in locations near Interstate 80 within proximity to the growing dairy industry in the mountain states and upper Midwest, DED recruiters partnered with Sidney Economic Development to highlight available sites and buildings in the community. Western Nebraska’s dry, arid climate was also appealing to the company as a conducive environment for plastics production.
Agri-Plastics is currently working with DED officials to complete a Site and Building Development Fund application for acquisition of the Sidney location, and is also applying for the state’s economic incentives program, Nebraska Advantage. In addition, city officials are working with the company to assist in project development through Sidney’s LB840 fund, which collects local taxes for economic growth.
“Support from state and local economic development officials facilitated Agri-Plastics’ vision to expand near the gateway to emerging dairy markets in the southwest and mountain states,” said Darren VanBuuren, Agri-Plastics CEO and president. “While we considered growing our company in these other states, accessibility to Nebraska’s strong economic development programs and opportunities to build our workforce in Sidney are in line with our company’s goals for growth.”
Mark Arend
Editor in Chief of Site Selection magazine
Mark Arend has been editor in chief of Site Selection magazine since 2001. Prior to joining the editorial staff in 1997, he worked for 10 years in New York City at Wall Street Computer Review, ABA Banking Journal and Global Investment Technology. Mark graduated from the University of Hartford (Conn.) in 1985 and lives near Atlanta, Georgia.
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