Minnesota’s economic expansion expected to continue
Friday, August 08, 2014
Article by Finance & Commerce
July marked the big 2-0 for Minnesota – as in the 20th straight month supply managers in the state predicted an expanding economy.
Minnesota posted a score of 66.4 in in July’s Business Conditions Index, a monthly survey of supply managers by Creighton University. That’s down from June’s 70.1 but still a regional high and up from 54 in July 2013.
Scores greater than 50 indicate a state’s economy is expanding over the next three to six months, while scores less than 50 show that the economy is shrinking.
All other components of Minnesota’s index showed growth, as well:
Inventories were at 57.1, compared with 56 in July 2013.
Production or sales were at 77.9, up from 54.6 a year earlier.
New orders were at 77.5, up from 50.9 a year ago.
Delivery lead time was at 61.0, a climb from 55.7 in July 2013.
Employment was 58.4, up from 52.8 a year ago.
The report credited durable goods manufacturers such as metal producers for much of the growth. Metal producers are benefitting from growth in other industries, said Kirby Sneen, vice president of the Manufacturers Alliance. Whatever industry happens to be booming, metal production usually has a role to play, and Minnesota manufacturers have become adept at diversifying so they don’t become chained to the fortunes of a single industry.
They also benefit from an increasing willingness by companies to consider the total cost of producing their products instead of simply outsourcing the work to places where the goods can be manufactured the cheapest, Sneen said. He pointed to an undisclosed medical manufacturer in the Twin Cities that has three suppliers all within a short distance of the company. When challenges arise, the company is only a short drive away from sitting down with the supplier to determine the best way to solve the problem.