Business Conditions Index stays strong in Kansas

The Business Conditions Index for the Mid-America region remained strong for a fifth consecutive month, according to the April survey of supply managers and business leaders in a nine-state region.

The index, a leading economic indicator, slipped to 61.7 from March's 64.3, but still remains healthy. An index of 50 is considered growth neutral.

This marks the fifth straight month that the index has remained above growth-neutral, signaling an expanding regional economy.

"While the financial turmoil in Europe is a clear risk to the recovery, manufacturing and value-added services sectors in the Mid-America region are experiencing very strong business activity," said Ernie Goss, a Creighton University economics professor, in a news release.

"This leading economic activity will continue to push overall economic growth for the nine-state region higher through the third quarter of 2010."

The region added 25,000 jobs in the first quarter of 2010, Goss said. He expects job growth to be somewhat stronger in the second quarter.

Specifically, the Kansas index rose for the sixth straight month, to 62.1 from March's 54.1 and February's 50.8.

The state lost more than 4,000 jobs in the first quarter, Goss said, and unemployment should rise slightly in the second quarter despite more than 5,000 job gains.

For the fourth straight month, the regional employment index rose above growth-neutral. The April job reading climbed to 58.4 from March's 57.9.

In April, 28.4 percent of supply managers reported job gains for their firms, while 11.6 percent indicated that their firms cut employment from March levels.

"Despite improved hiring, I expect unemployment rates for most states in the region to remain at elevated levels as firms remain overly cautious about hiring new workers," Goss said in the release. "There is just too much economic uncertainty right now for firms to hire more aggressively."

Economic conditions also remained above growth-neutral in the other eight states surveyed by Goss: Arkansas, Iowa, Minnesota, Missouri, Nebraska, Oklahoma, North Dakota and South Dakota.