A September survey of business supply manager suggests a slump in economic growth still grips nine Midwest and Plains states, according to a report issued Tuesday.
The decline was the fifth in six months for the overall index, which had remained above growth neutral for 32 straight months.
"The trade war and the global economic slowdown have cut regional growth to approximately two-thirds that of the U.S.," said Creighton University economist Ernie Goss, who oversees the survey. "Based on the last two months of surveys of manufacturing supply managers, both the U.S. and Mid-America economies are likely to move even lower in the months ahead."
The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth. A score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Economic optimism, as captured by the business confidence index, rose slightly last month. It hit 47.7, compared with August's 45.0.
"I expect business confidence to depend heavily on trade talks with China, and the passage of the nation's trade agreement with Canada and Mexico," Goss said.
Companies shrank inventories of raw materials and supplies last month, the report said.
"This is yet another signal of weak business confidence as manufacturers reduce their inventories of raw materials and supplies based on an anemic sales outlook," Goss said.
The regional trade numbers remained far below growth neutral in September. The index for new export orders sank to 36.2, down from August's 39.6, and the import index increased slightly to 42.4 from 42.3 in August.