CHICAGO The economic outlook for nine U.S. Midwest and South-Central states brightened in January with expectations of expansion at a healthy pace in the first half of the year, according to a survey of supply managers on Tuesday.
Creighton University's Business Condition Index rose to 58.9 last month from 57.5 in December. A reading of 50 is considered growth neutral, while a reading above that signals expansion over the next three to six months.
"The regional economy is beginning the year on a very healthy note with global growth, record low interest rates, and a cheap dollar providing a significant boost, especially for firms linked to agriculture and energy," said Creighton University Economics Professor Ernie Goss in a statement.
He added that an 18 percent jump in farm commodity prices over the past year is showing up in farmers' income and in industries tied to agriculture.
The survey's employment index climbed to 56.3 in January from 51.1 in December, with areas dependent on the agriculture and energy sectors experiencing stronger new hiring.
The survey's prices-paid index, which tracks the cost of raw materials and supplies, rose to 84.2 in January from 81.1 in December, marking the fifth time in the past year the inflation gauge was above 80.
The healthy regional outlook fits into an increasingly rosy national economic picture, with a report from the Institute for Supply Management on Tuesday showing U.S. manufacturing expanded more than expected in January, and a report Monday showing consumer spending on firmer footing.
Supply managers were surveyed in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
The Omaha, Nebraska-based Creighton Economic Forecasting Group has conducted the monthly survey since 1994, using the same methodology as the national survey by the Institute for Supply Management.
(Reporting by Karen Pierog; Additional reporting by Ann Saphir, Editing by Chizu Nomiyama)