Report says virus outbreak making mark on Midwest economy
Worries about a new virus first detected in China that's infected tens of thousands of people globally are making a mark on the economy of a nine-state region in the Midwest and Plains.
The Mid-American Business Conditions Index sank in February to 52.8 from 57.2 in January, according to a survey report issued Monday.
"This month's softer reading plus the mounting negative impacts from the (virus) should concern policymakers regarding the strength of the economy," said Creighton University economist Ernie Goss, who oversees the survey. "Fully 40% of supply managers reported negative impacts from the (virus)."
The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth. A score below that suggests decline. The survey covers Minnesota, Arkansas, Iowa, Kansas, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The regional trade numbers were mixed. The index for new export orders rose to 58.0 from January's 52.1. But the outbreak of the virus that causes the COVID-19 disease reduced purchases from Asia as the import index fell to 40.4 from January's 46.3.
About 24% of the supply managers who responded to the survey said the virus outbreak had pushed their companies to switch to domestic vendors for certain purchases. One in five supply managers reported that the outbreak forced their companies to rethink sources of supplies and raw materials.
The February employment index declined to 46.4 from January's 53.8. trade constraints, the lack of available workers and the virus outbreak produced job losses for the region's manufacturing sector.
Looking ahead six months, the business confidence index slumped to 51.4 last month from January's 58.8.
"The emergence of the (virus) offset the positive confidence impact of the recent passage of the U.S.- Canada-Mexico Trade Agreement and phase one of the trade agreement with China," Goss said.