Creighton University’s MidAmerican Business Conditions Index for Iowa slid in May as concerns over supply chain disruptions continued, with poorer performances appearing in most sectors measured by the monthly survey of supply chain managers.

Iowa’s index score fell to 59.6, down from 69.8 in April and a nearly 20-point decline from March.

The survey of supply chain managers in a nine-state region including Iowa represents attitudes about the economy over the next three to six months. The index ranges from zero to 100, with a score of 50 indicating neutral growth.

Iowa’s score consists of new orders, production or sales, delivery lead time, employment, and inventories. The scores for all areas declined in May, except for delivery lead time, which increased slightly for the month. Inventories was the only category that fell below neutral growth in May, with a score of 48.5, the survey showed.

Ernie Goss, director of Creighton University’s Economic Forecasting Group, said that despite a declining score, durable and nondurable goods manufacturing in Iowa are showing solid growth.

“[They] are growing at a solid pace with companies linked to the farm economy expanding at a healthy rate,” Goss said. “The state’s leisure and hospitality industry has benefited from this healthy growth, but employment in this industry remains 8,300 jobs (5.7%) below pre-pandemic levels.”

For the overall nine-state region, the index fell to 60, from 65.9 in April.

“Creighton’s monthly survey results indicate the region continues to add manufacturing activity at a solid pace, but with significant, and rising inflationary pressures,” Goss said. “Supply chain disruptions remain the greatest challenge for the rest of 2022, according to supply managers.”

About two-thirds of supply managers expect supply chain disruptions to remain the greatest economic challenge to their business for the remainder of 2022. One in five said higher inflation will be their greatest challenge. Fewer than 5% listed labor shortages as their biggest concern.

Six in 10 supply chain managers responding said they expect an economic downturn in the next six months, which was represented in the decline in the survey’s confidence index that fell sharply to 21.7, from 33.4 the previous month.

The survey’s wholesale inflation gauge climbed slightly to 91.7 in May as supply chain managers expect prices for raw materials and supplies to rise by 8.7% in the next six months, or 17.4% annualized, Goss said.

U.S. Bureau of Labor Statistics data shows that commodity prices are up about 21.5% over the past year. Farm products are seeing increases of about 34.4%, fuels are up 49%, and metal products have risen by nearly 25% during the past year, the report showed.

“Given current significant inflationary pressures, I expect a rate hike of one-half of one percentage point at each of the Fed’s next two rate setting committee meetings despite the current economic slowdown and the rising probability of a recession,” Goss said.