State economic indicators demonstrate strong growth

Missouri Department of Economic Development Director Kelvin L. Simmons reported May 5 that a variety of economic indicators are reflecting strong growth trends for the state.

"The economic trends paint a very clear picture about Missouri's economy," Simmons said in a news release. "Missouri's economy is fundamentally strong; we have a strong and vibrant business climate; jobs are being created and economic growth is occurring. In fact, we have been seeing strong signs of economic momentum in Missouri for more than a year and, particularly, since July of 2003.

"Those trends are reflected in many of our indicators, including job growth, taxable sales, personal income, new businesses and manufacturing."

Simmons released another in a series of economic conditions reports from the Department of Economic Development's research center. The reports are provided periodically to assess the overall progress of the state's economy.

Missouri's job growth during the first quarter of 2004 ranks the state 16th in the nation with the addition of 6,100 jobs. But since July, Missouri has added 29,300 jobs (seasonally adjusted), ranking the state ninth in the nation and better than all eight states that border Missouri.

"On a percentage basis, our job growth during the first quarter of this year has been at the national average, however, since July, our growth rate has been nearly double the national rate," Simmons said.

Missouri's percentage of job growth between July and March was 1.1 percent, compared with the national rate of 0.57 percent.

For the past three years, Missouri's unemployment rate has consistently been well below the national rate, often by a half percent or greater. Missouri's seasonally adjusted March rate was 5 percent, well below the national rate of 5.7 percent and six-tenths below where it was in March 2003.

The state's unadjusted unemployment rate in March was 5.1 percent, compared with the nation's rate of 6 percent.

Carol Fischer, director of the Department of Revenue, reported that taxable sales rebounded in Missouri during the second half of 2003. "Missouri's recent taxable sales reports, and what we have seen so far this year, indicate improvement in the consumer economy," said Fischer.

After nine consecutive quarters of negative growth in taxable sales, there was an increase the last two quarters of 2003. Quarterly taxable sales climbed by 0.55 percent in the third quarter and by 2.07 percent in the fourth quarter. Numbers for the first quarter of 2004 are not yet available.

New business formations were another strong indicator for Missouri, with 14,930 started during 2003 in nearly 100 different industries.

"Last year was the first time we were able to gather this data and the fact that we are adding more than 1,200 businesses a month tells a strong story about our business climate," Simmons said.

The conditions report also looked at personal income. During 2003 personal income in Missouri grew at a slightly higher rate on a per capita basis than the rest of the nation. Simmons attributed this rise to good growth during the second half of last year.

Simmons said Missouri's improving economic conditions reflect the state's efforts to transition its economy. Early in his administration, Gov. Bob Holden worked with business, education and community leaders around the state to identify industries that will create good paying jobs in the future. Those target industries are the plant and life sciences, advanced manufacturing, and information technology.

In addition, the governor directed the Department of Economic to seek statewide input and prepare a "Blueprint for Prosperity and Jobs," that provides strategies for transitioning the state's economy.

Missouri PMI surges

Missouri's Purchasing Managers Index continued to surge in April, reaching its highest level since 1994 thanks to strong scores in new orders, production and employment, according to a May 12 release from the Department of Economic Development.

The April PMI score for Missouri was 72.9, more than 10 points above the national average of 62.4. Missouri's April score also was more than 12 points higher than February and five points higher than March. It is nearly 20 points higher than the April 2003 score of 53.

This also marks the 27th consecutive month that the state's score has remained above the expansionary level of 50, offering further proof that Missouri's economy is growing and the manufacturing sector is getting stronger.

Missouri's highest scores were in new orders (84.8), production (83.1) and employment (64.6).

Economists consider the Purchasing Managers Index, which measures such factors as new orders, production, supplier delivery times, backlogs, inventories, prices, employment, and import orders and exports, a key indicator of economic conditions.

Overall, for states in the mid-America region, the average score increased to 70.3 in April from 69.7 in March. Other states in the survey included Oklahoma (82.3), Iowa (81), North Dakota (80), South Dakota (79.3), Kansas (71.6), Nebraska (64), Minnesota (63.5), and Arkansas (60.4).

The Purchasing Managers Index is part of a monthly Mid-American Business Conditions Survey, conducted by Creighton University in Omaha, Neb.