Iowa’s economy weakened slightly in June but remained in positive growth territory, according to a monthly survey of manufacturing supply chain managers.

The state’s Business Conditions Index score declined to 53.3 from 53.5 in May. The index ranges from zero to 100, with a score of 50 indicating neutral growth for the next six months.

Creighton University’s Mid-America Business Conditions Index, which covers the nine-state region stretching from Minnesota to Arkansas, climbed above growth neutral, improving to 51.3 from 48.2 in May.

“The overall index, much like the U.S. reading, has vacillated around growth neutral since December of 2023,” Ernie Goss, Creighton’s chair in regional economics, said in a prepared statement. “Additionally, supply managers remained pessimistic regarding the 2024 outlook with approximately 48% expecting a downturn in economic activity for the remainder of 2024.”

Other takeaways from the report include:

• The regional employment index slumped below growth neutral for the past six months but increased slightly to 44.0 from 43.7 in May.
• The wholesale inflation gauge for June dropped to 61.4 from 70.8 in May, indicating cooling inflationary pressures. “The regional inflation yardstick has moved into a range indicating inflationary pressures moving toward the Federal Reserve’s (Fed) target for the second half of 2024,” Goss said. “As a result, I expect the Fed to cut interest rates at its September meetings.”
• The inventory index, reflecting levels of raw materials and supplies, increased to 57.3 from 55.6 in May. “At this time, it cannot be determined if the buildup in inventories over the last several months is due to higher expected future sales or a slowdown in current sales producing rising inventories,” Goss said.
• The rising value of the U.S. dollar has made U.S. goods less competitively priced abroad, hurting export numbers, with new export orders dropping to 45.3 from 46.7 in May. Imports performed better, with an index score improving to 52.2 from 41.2 in May.
• Confidence among the supply chain managers who responded to the survey improved slightly to 34.2 from May’s 33.2. “Approximately 48% of supply managers expect worsening business conditions over the next six months,” Goss said. “This is a deterioration from May’s 42% of supply managers expecting slowing economic growth.”