Warning signals last fall and early this year of a recession have cooled with the Creighton University Mid-America Business Conditions Index remaining above growth-neutral for a fifth consecutive month.

Iowa’s overall June index climbed from 51.9 to 55.4, with all components reaching above 50. The index ranges from 0 to 100, with a score of 50 representing growth-neutral. In Iowa, new orders were at 51.6, production or sales at 50.7, delivery lead time at 57.0, employment at 59.1 and inventories at 58.8.

Iowa also expanded exports by 10.6% for the first four months of 2023 compared with the same time in 2022, with machinery equipment export growth of 30.4% leading the way, according to U.S. International Trade Association data.

The overall index, which covers a nine-state region from Minnesota to Arkansas, dropped from 51.3 in May to 50.8 for June.

“After flashing recession warning signals between November 2022 and January 2023, Creighton’s monthly survey of manufacturing supply managers over the past several months is now pointing to positive but slow growth with significantly lower inflationary pressures at the wholesale level,” said Ernie Goss, the Jack A. MacAllister chair in regional economics at Creighton. “While it’s too early to tell if the Federal Reserve is achieving its ‘soft landing,’ results from Creighton’s surveys over the last several months are somewhat promising on the inflation front, but with waning economic growth. Even so, I expect the Federal Reserve’s interest rate setting committee, the FOMC, to raise short-term interest rates at its July 25-26 meetings.”

Hiring levels remained in the slow-growth reading for a fifth consecutive month, dropping from 52.3 in May to 50.0. Employment in the region expanded by 2.1% over the past 12 months, while U.S. employment increased by 2.7% during the same time period.

“Employment growth and levels remain solid due to manufacturers’ labor hoarding,” Goss said. “That is, manufacturers in the region are maintaining employment levels due to a fear of an inability to hire back once business activity levels pick up.”

The report also noted that the wholesale inflation index declined from 74.0 in May to 67.4, with supply managers, on average, expecting wholesale prices for the products and services their firm purchases to climb by 0.7% during the next six months.

Meanwhile, the confidence index improved from 29.6 to 32.6.

“Approximately 48% of supply managers expect economic growth to decline in the next six months,” Goss said.