Survey: Minnesota's economic outlook possibly the best in the Midwest

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The folks at Creighton University's Institute for Economic Inquiry aren't certain as to why Minnesota leads the pack when it comes to manufacturing strength and economic outlook in the Midwest.

Though there are a couple theories.

But first, the background: the institute's latest monthly report on economic indicators in "Mid-American states" suggests positive news across a range of firms and industries in Minnesota. The report says there's reason to believe that economic growth in the state will be higher than in the rest of the region – and possibly nation – through the end of the year.

Known as the "Business Conditions Index," it's a ranking system that goes from 0 to 100, with an index greater than 50 pointing to an "expansionary economy" in the next three to six months.

Minnestoa's index? 54.3 for June – up from a 51.1 index in May, and the highest of all the nine states in the survey. It's also higher than the 53.0 national reading.

How does the index work, and what does it mean?

Each month researchers conduct of survey of supply managers, who are asked to provide a sense of their companies' new orders, production, sales, employment, inventories and delivery lead time.

In other words, it's a gauge of supply and demand for a company's products and goods, and whether or not any new hiring is going on.

Dr. Ernie Goss, director of the Institute for Economic Inquiry, told BringMeTheNews the theory behind the study is this: When supply managers' buying is up, it points to strong growth in the industries they serve and is a sign that the overall economy will be doing well over the course of the next few months.

That's how things are looking in Minnesota. But why are we doing better than the rest of the country?

Goss said that strong automotive and medical device manufacturing may play a significant role.

Although Minnesota lost its Ford plant a couple years ago, he points out vehicle parts production – including electronic components for cars – is still going strong in the state.

On top of that, he says, metal manufacturing is faring better here than in the other states in the survey, and the housing market has made a comeback as well.

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