The Creighton University Mid-America Business Conditions Index economic indicator was released today, noting volatility, higher prices and overall weak numbers for the first quarter of 2025.

Produced by economists at Creighton University, the index covers a nine-state region stretching from Minnesota to Arkansas. The index uses the same methodology as the national Institute for Supply Management (ISM) and ranges between 0 and 100, with 50.0 representing growth neutral. For May, the index declined to 51.0 from April’s higher 53.3.

“The Creighton survey is recording significant volatility, much like other regional economic measures. Proposed and implemented tariffs are producing economic volatility as well as slower growth,” Ernie Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister chair in regional economics, said in a press release.

Top highlights include:

• About one-third of manufacturers reported switching input providers due to tariffs or the threat of tariffs.
• More than half of supply managers reported that tariffs and impending tariffs have pushed prices higher for production inputs.
• As indicated by a supply manager in the May survey, “Tariffs are being used as a means to increase prices, regardless of whether they are applicable or not.”
• As a result of slowing growth, Goss expects a cut in short-term interest rates at the Federal Reserve’s next meetings on June 17-18.
• The May regional manufacturing employment index remained below growth neutral.
• According to a U.S. International Trade Administration data, the regional economy exported $23.4 billion in manufactured goods for the first quarter of 2025, compared to $23.7 billion for the same period in 2024, for a 1.4% decline.

Supply managers had this to say in the May survey:

• “I understand the significance of the tariffs, and perhaps they are even warranted, in some cases. 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 to strategize future purchases.”  
• “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.”
• “While prices have increased, most are within the inflationary averages. Long-term contracting has limited the amount of increases and are staggered to prevent significant interruptions to project budgets during any one period.”  
• “The Trump administration has done an admirable job keeping inflation, prices and interest rates down and increasing re-shoring of goods and services. His ‘4D Chess match’ with adversaries is amazing to observe as he brings integrity and the rule of law back into the global order.”

Employment: The May employment index increased to a weak 49.4 from 44.9 in April.
“First quarter employment was pushed higher due to higher production, in anticipation of the fallout from tariffs. Readings from the last two months represented a return to manufacturing job losses in the region,” Goss said.

U.S. Bureau of Labor Statistics data show that the region shed 12,500 (-0.8%) manufacturing jobs over the past 12 months. The U.S. lost 82,000 (-0.6%) manufacturing jobs over the same period.

Wholesale Prices: The May price gauge climbed to 67.4 from 65.0 in April.

“The regional inflation yardstick has moved into a range indicating that inflationary pressures are moving higher at the wholesale level. However, due to a slowing economy, I expect the Fed to cut interest rates at its next meetings on June 17-18,” Goss said.

Roughly 56.5% of supply managers reported that tariffs and impending tariffs have pushed prices higher for production inputs.

Confidence: Looking ahead six months, economic optimism, as captured by the May Business Confidence Index, increased to 43.2 from April’s 35.3.

“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,” Goss said.

Inventories: The regional inventory index, reflecting levels of raw materials and supplies, fell to 51.6 from April’s 56.7.

“In order to front-run tariffs, firms have expanded inventories for four of the first five months of 2025,” Goss said.

Trade: Recent uncertainty regarding tariffs and trade restrictions pushed new export orders lower for May. New export orders slumped to 44.8 from 46.2 in April. As a result of record imports for the first two months of 2025, supply managers pulled back on purchasing from abroad in March, April and May. The May import index rose from April’s record low of 12.5 to 29.8 for May.

According to ITA data, 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, for a 1.4% decline. In terms of export gainers, North Dakota registered the top gain with an 8.9% addition, and South Dakota recorded the largest loss with a 17.7% reduction in exports of manufactured goods.

Other survey results of the May Business Conditions Index include: new orders declined to 51.0 from 52.9 in April; the production or sales index sank to 49.4 from 55.4 in April; and the speed of deliveries of raw materials and supplies fell to 53.7 from April’s 56.8. Lower readings indicate falling supply chain disruptions or delays.

Iowa: The state’s Business Conditions Index for May declined to 49.9 from 53 in April. Components of the overall May index were: new orders at 50.2; production or sales at 47.6; delivery lead time at 53.2; employment at 48.1; and inventories at 50.4. According to ITA data, the Iowa manufacturing sector exported $3.4 billion in goods for the first quarter of 2025, compared to $4 billion for the same period in 2024, for an 8.6% decline.

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 Mid-America report is produced independently of the national ISM. Watch Goss discuss the May report here.