Drought drags down Midwest economy
OMAHA, Neb. (AP) -- The ongoing drought, combined with global economic turmoil, is hurting business in nine Midwest and Plains states and boosting worries about the possibility of another recession, according to a monthly report released Wednesday.
The region's overall economic index for July plunged below growth neutral for the first time since 2008. The index hit 48.7, compared with 57.2 in June.
The survey of business leaders and supply managers uses a collection of indexes ranging from zero to 100. Any score above 50 suggests growth while a score below 50 suggests decline for that factor.
Concerns about Europe's debt woes and the slowing U.S. economy already were weighing on the region's economy before the drought hit this summer.
Creighton University economist Ernie Goss, who oversees the survey, said the drought will hurt farm income while the strengthening dollar hurts exports. So two of the most important positive factors in the region's economy are being undermined.
"Recent gains in the dollar have made U.S. goods less competitively priced abroad. Combine that with drought conditions and we will see farm income take a hit and that will spill over into other industries in the region," Goss said.
The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.