After six straight months of above growth neutral readings, the Creighton University Mid-America Business Conditions Index, a leading economic indicator for the nine-state region stretching from Minnesota to Arkansas, sank below the 50.0 growth neutral threshold for July.

The Business Conditions Index, which ranges between 0 and 100 with 50.0 representing growth neutral, declined to 49.4 for July from 50.7 in June.

Highlights from the July report include:

• Employment losses occurred for the fourth straight month.
• The regional inflation yardstick moved into a range indicating that inflationary pressures are moving higher at the wholesale level.
• Only 6.7% of supply managers reported that tariffs caused their firms to move input purchases from international providers to domestic suppliers.
• According to U.S. International Trade Administration (ITA) data, the regional economy exported $38.9 billion in manufactured goods for the first five months of 2025, compared to $40.8 billion for the same period in 2024, for a 4.7% decline.
• In terms of 2025 export gainers, North Dakota registered the top percentage gain with a 42.6% addition, and South Dakota recorded the largest percentage loss with a 19.9% reduction in the export of manufactured goods.  
• The Iowa manufacturing sector exported $6.2 billion in goods for the first five months of 2025, compared to $6.9 billion for the same period in 2024, for a 10.3% decline.

“Creighton’s latest survey continues to reflect job losses across the region, accompanied by elevated wholesale inflation,” Ernie Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister chair in regional economics, stated in a press release. “Supply managers expressed growing concern that rising tariffs could further accelerate inflationary pressures. Despite these concerns, only 6.7% of surveyed supply managers reported shifting purchases from international to domestic suppliers in response to the tariffs.”

Comments from supply managers in July include:

• “Most of the suppliers I work with are dropping their production down to four-day work weeks. Nothing like a 20% cut in pay.”
• “I believe that the President’s tariff changes are going to help our country to be better trading partners. It will take a bit of time for it all to shake out though.”  
• “No changes to international purchases until a final tariff rate is in place. Certain products have been put on hold.”
• “We are not accepting pricing increases and have any tariffs added as a surcharge, so they are easy to remove.”
• “Long-term contracts have been key to holding pricing steady. Where there are extreme cost pressures with suppliers, collaboration on a resolution is the method of choice, while rare.”

Employment: The July employment index fell to 45.4 from 49.4 in June, marking the fourth consecutive month below the growth-neutral threshold of 50. This sustained weakness reflects ongoing labor market challenges in the regional manufacturing sector.

“The Creighton survey has now recorded six straight months of job losses across the nine-state Mid-America region,” Goss stated. “While employment rose in the first quarter—driven by increased production ahead of anticipated tariff impacts—the last four months have signaled a return to regional manufacturing job declines,” said Goss.

U.S. Bureau of Labor Statistics data show that the region shed 12,900 (-0.9%) manufacturing jobs over the past 12 months. The U.S. lost 89,000 (-0.7%) manufacturing jobs over the same time period.   

Wholesale Prices: The July price gauge climbed to 69.7 from 67.9 in June.

“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 regional and U.S. economies, I expect the Federal Reserve to cut interest rates at its Sept. 16-17 meetings,” Goss stated.

On average, supply managers expect tariffs to push input prices up by 7.8% over the next 12 months. This is up from 7.5% recorded in June.   

Confidence: Looking ahead six months, economic optimism, as captured by the July Business Confidence Index, dropped to 42.6 from June’s 50.0.

“Concerns regarding tariffs and slowing new orders pushed supply managers’ expectations lower. Only one in six supply managers expect rising economic conditions for their firm over the next six months,” Goss stated.

Inventories: The regional inventory index, reflecting levels of raw materials and supplies, increased to 49.1 in July from June’s 46.9.

“Rapid expansions in inventories in the first quarter are now being offset by monthly pullbacks in buildups,” said Goss.

Trade: Recent uncertainty regarding tariffs and trade restrictions pushed new export orders lower for the last four months. New export orders slumped to 38.3 from 43.4 in June. As a result of record imports for the first two months of 2025, supply managers pulled back on purchasing from abroad in the last five months. The July import index increased to a still weak reading of 36.3 from 30.0 in June.

Supply managers were asked about their firm’s reactions to tariffs and threats of tariffs. Only 6.7% of manufacturing supply managers reported switching from international suppliers to domestic suppliers. More than one-third, or 67%, reported making no changes of suppliers due to tariffs. The remaining 26.3% indicated that their firms had switched from one international supplier to another international input supplier.  

Other survey components of the July Business Conditions Index were: new orders dropped to 45.5 from 52.4 in June; the production or sales index increased slightly to 49.0 from 48.5 in June; and the speed of deliveries of raw materials and supplies rose to 57.8 from June’s 56.5. Higher readings indicate slower deliveries and/or rising supply chain disruptions or delays.

Iowa: The state’s Business Conditions Index for July declined to 43.7 from 48.0 in June.

Components of the overall July index were: new orders at 43.9; production or sales at 47.3; delivery lead time at 53.6; employment at 33.2; and inventories at 40.6. According to ITA data, the Iowa manufacturing sector exported $6.2 billion in goods for the first five months of 2025, compared to $6.9 billion for the same period in 2024, for a 10.3% 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 Institute of Supply Management.