The Creighton University Mid-America Business Conditions Index began the new year above growth-neutral, climbing from 48.7 in December 2024 to 51.1 in January. The index, covering a nine-state region from Minnesota to Arkansas, ranges from 0 to 100, with a score of 50 representing growth-neutral.

“January job gains for manufacturers in the nation are encouraging after the nation and region shed 93,000 and 7,900 jobs, respectively, in 2024,” Ernie Goss, the Jack A. MacAllister chair in regional economics at Creighton, said in a news release.

Iowa’s overall January index increased slightly from 40.8 to 43.1 but was still the lowest mark in the region. New orders in the state climbed to 46.9 from 44.3, production or sales improved to 43.9 from 42.1, and delivery lead time was up to 46.3 from 45.4.

Employment dropped to 35.1 from 47.8 and inventories jumped to 43.0 from 24.6.

According to U.S. International Trade Administration data, Iowa experienced a $1.5 billion drop in 2024 year-to-date manufacturing exports compared with the same period in 2023, a 9.6% decline.

The regional employment gauge climbed above growth-neutral for the first time since December 2023, reaching 51.1 in January from December’s 46.4. Despite weak manufacturing employment readings over the past year, approximately 1 in 5 firms reported labor shortages, according to the Mid-America report.

About 31.8% of supply managers expect artificial intelligence to have a positive impact on their company this year and in the years ahead. Meanwhile, more than 7 in 10 supply managers indicated concern regarding President Donald Trump’s tariffs.

The January price gauge rose to 62.0, its highest level since May 2024, and up from 57.1 in December.

“The regional inflation yardstick has clearly moved into a range indicating inflationary pressures are still modest but moving higher,” Goss said. “As a result, I expect the Fed to leave interest rates unchanged at its March 18-19 meetings.”

The confidence index, which looks ahead six months, soared to 61.4 from 52.8 in December.

“Approximately half of supply managers expect improving business conditions over the next six months,” Goss said.