Survey: Oklahoma manufacturing sector improves

Thursday, April 1st 2004, 12:00 am

By: News On 6

OMAHA, Neb. (AP) _ The manufacturing sector in Oklahoma climbed in March for the third consecutive month, a regional survey of supply managers and business leaders indicated Tuesday.

Oklahoma's Business Conditions Index, compiled by Creighton University economist Jim Knudsen, climbed to 70.5 in March, compared to 65.4 in January and 54.2 in January. An index reading above 50 indicates expansion, while one below 50 indicates that manufacturing activity is contracting.

``Components of the overall index for March were 76.3 for new orders, 73.6 for production, 57.9 for inventories and a regional high 73.7 for employment,'' Knudsen said. ``This is the second month in a row that Oklahoma has recorded the highest employment reading in the nine-state region.

``I expect the Oklahoma employment picture to improve well into the summer of this year.''

The overall manufacturing sector in the Midwest improved in March, but that was accompanied by higher inflationary pressures, the regional survey indicated Thursday.

The overall index in the Mid-America Business Conditions Survey was 69.7, higher than last month's 64.2 and the highest recorded since the survey began in 1994.

The prices paid index, however, indicated strong inflationary pressures, Knudsen said. The index that tracks prices paid for raw materials and supplies jumped to 87.5 from February's 82.2.

Higher steel, oil and commodity prices were driving the cost of doing business sharply higher, Knudsen said.

Higher prices have not yet shown up significantly for consumers, but they could force the Federal Reserve to raise interest rates before the end of the summer to thwart a threat of excessive inflation, Knudsen said.

Creighton's survey includes the states of Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

A similar national survey showed the manufacturing sector expanding strongly in March. The Institute for Supply Management said its manufacturing index registered 62.5, compared with a reading of 61.4 in February. The national reading was above the expectations of analysts, who had forecast a figure of 59.5.