Mid-America economy ekes gain, prices soar -survey

CHICAGO, Aug 1 (Reuters) - Business activity in nine U.S. Midwest and south-central states improved slightly in July, although inflationary pressures soared to a record high, according to an economic survey released on Friday.

Creighton University's Business Conditions Index inched up to 51.5 last month from 50.5 in June. The index ranges between 0 and 100, with a reading above 50 indicating an economic expansion over the next three to six months.

Higher energy and commodity prices pushed the survey's inflation gauge, which tracks the cost of raw materials and supplies, to a record high 93.9 from 91.7 in June. July also marked the fifth consecutive month the index was above 90.0.

"Based on the survey results, I see little change going forward for the region, with excessive inflationary pressures, and slight job losses and an economy that continues to grow at an anemic pace," said Creighton University Economics Professor Ernie Goss in a statement. "Without strong farm income and healthy exports, the regional economy would already be dipping into recessionary territory."

The survey's employment index fell last month to 41.4, its lowest since December 2001, from 46.2 in June.

The Omaha, Nebraska-based Creighton Economic Forecasting Group has conducted the monthly survey since 1994 using the same methodology as the National Institute for Supply Management.

Supply managers and business leaders were surveyed in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. (Reporting by Karen Pierog; Editing by James Dalgleish)