Manufacturing sector showing strength
A gauge of Minnesota's manufacturing sector is showing strength.
Minnesota's Business Conditions Index, as compiled by economists at Creighton University, rose to a fraction above 55 in March from a reading of 52 in February. A reading above 50 implies economic expansion over the coming three to six months.
March was the fourth straight month of readings above 50 for Minnesota. Employment registered 53.5, up from a reading of less than 52 in January and February.
New orders came in at 55.7, production or sales at 58.6, delivery lead time at 55.2, and inventories at 52.7.
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"Both durable and nondurable goods manufacturers detailed expanding business activity. Growth continues to be especially healthy for metal producers and machinery manufacturers such as agriculture implement manufacturers," said Ernie Goss, director of Creighton University's Economic Forecasting Group.
The overall index covering nine central states climbed to 58.2 from February's tepid 53.1.
"This is the largest one-month jump that we have recorded since January 2012," Goss said. "However, we will have to record several consecutive months of readings like this to be confident that the regional economy is picking up steam. The strongest new orders growth in two years was the prime factor boosting the overall index higher."
Employment for the overall index was below growth neutral for January, but the improvement that started in February continued into March. The March number reached 56.3 from February's 51.6.
"Over the last year, the region added jobs at a pace of 1.4 percent, ranging from a low of 0.2 percent for Arkansas to 5 percent for North Dakota," Goss said. "Our survey results point to an upturn in regional job growth in the months ahead."
Economic optimism leapt in March from 50.6 in February to 58.2 last month.
"This month we asked supply managers how the federal spending sequestration was affecting their company. More than three-fourths, or 76.3 percent, indicated that the cuts were having no impact on their company. The remaining 23.7 percent reported only modest impacts. None of the businesses reported significant impacts," Goss said.