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Economic Rebound Expected to Weaken in First Half of 2021

Lukas Partners supports Creighton University Economics professor, Ernie Goss, Ph.D, to create and distribute a monthly video summarizing his Mid-America Business Conditions Index, a survey of supply managers, which is a leading economic indicator for the nine-state Midwestern region stretching from Minnesota to Arkansas.

In Dr. Goss’ December video recap, he anticipates the economic rebound from the COVID-19 pandemic to weaken in the first half of 2021. In December, the Mid-America Business Conditions Index dropped for a second straight month since April, signaling slower economic growth since the pandemic began. According to Goss, the region needs to have many more months above growth neutral or 50.0 to get back to a pre-COVID-19 regional economy.

There have been some key improvements since the index bottomed out in April 2020 due to COVID-19 pandemic—some of the December results are:

-Nebraska was the best performing state for employment.

-56% of manufacturers reported an upturn in new orders. Approximately 27% of manufacturers reported upturns in employment for December.

-Manufacturers anticipate a 2.1% average pay increase for 2021.

Finding and hiring qualified workers will continue to be a challenge in 2021. Goss also anticipates the latest stimulus package to push the inflation rate higher. He believes there will be an uptick in inflation in the second half of 2021.

View Goss’ December recap video:

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