Manufacturing in the Midwest slumped in August after 32 months of growth, Creighton University found in its monthly survey of supply managers in nine states.

The Mid-America Business Conditions Index for Iowa fell to 49.7 in August after posting 52.6 in July. Anything over 50 suggests growth. The state’s new orders were at 51.8; production or sales, 49.4; delivery lead time at 59.4; employment, 45.7; and inventories, 42.1. Manufacturers experienced slightly positive growth over the past 12 months, reported Creighton economist Ernie Goss. 

However, there were signs of trouble. “Weakness in the [entire nine-state] region’s farm and manufacturing sectors produced by tariffs and a global economic slowdown pulled regional growth below that of the nation,” said Goss, director of Creighton’s Economic Forecasting Group. “Based on our manufacturing survey over the past several months, I expect overall growth to slow and potentially move into negative territory in the months ahead.”

Across the region, the index fell to 49.3, the first reading below growth-neutral in three years. That, Creighton reported, is a sign of the economy contracting. The index was 52 in July. 

Goss said surveyed factory leaders continue to complain about worker shortages and a slowdown in sales.

Roughly 44% of supply managers said trade tariffs were their “greatest economic challenge for the next 12 months.” The “new export orders index” fell to 39.6 from July’s 44.7. The region’s “import index” also slumped, to 42.3 from 43.8 in July.