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Farm income boosts Midwest economy, but inflation remains highOMAHA, Neb. (AP)--The economic outlook for the Midwest and Plains region improved in March as farm income remained strong and the region experienced fewer problems in the housing market than the rest of the nation, according to a report released April 1. The monthly survey of supply managers and business leaders in nine states showed the overall economic index climbing to 54.3 in March from February's 49.5 and January's 50.6. Any score greater than 50 on the index, which ranges between 0 and 100, indicates an expanding economy over the next three to six months. Creighton University economics professor Ernie Goss said two key factors helped the region's economy. "First, there is less fallout from the downturn in the housing market, and second, there is record farm income stemming from very high agricultural commodity prices," Goss said. And the region has benefited from the ethanol industry's strong presence in the area, which includes Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. The region's employment index also improved in March and registered 52.4. That's up from February's 48.9 and January's 46.8. But Goss said the high crop prices have helped push the survey's measure of inflation to the highest level since the survey began in 1994. That raw materials and supplies index jumped to 90.3 in March from February's 88.8 and January's 79.9. And the supply managers still weren't very optimistic, citing the economic problems the nation faces, Goss said. The confidence index rose slightly, to 38 in March from February's 37.8, but it remained extremely weak. Goss said exports helped the region's economy last month as the decline in the value of the dollar made U.S. goods more affordable abroad. The export orders index climbed to 57.5 in March from February's 56.3. But the import index also grew in March to 57.9 from February's 52.1. Other components of March's overall index were: --New orders at 55.8, up from February's 44.6; --Production at 57.7, up from 51.1 the previous month; --Inventories at 56.3, up from February's 53.2; and --Delivery lead time at 46.7, down from 54.7 in February. The Creighton Economic Forecasting Group has conducted the monthly survey since 1994. The Institute for Supply Management, formerly the Purchasing Management Association, began to formally survey its membership in 1931 to gauge business conditions. The Creighton Economic Forecasting Group uses the same methodology as the national survey. 4/21/08 Date: 5/1/08
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