South Dakota’s economy is trending up from May, but not by much.
That’s according to a new manufacturing index.
The Mid-America Manufacturing Index for June is out, and South Dakota improved upon May’s numbers.
Although the report shows the region and South Dakota are above growth neutral, economists said the numbers can be deceiving.
The report shows that inflationary pressures are cooling from previous months. However, many in South Dakota and the region are pessimistic about the economic outlook for the remainder of the year.
Creighton University economist Ernie Goss publishes the index. He said South Dakota is losing jobs.
"Now manufacturing’s losing jobs, agriculture we’re seeing job losses there. We’re seeing job losses in the important sector in South Dakota is finance and banking. And that’s spilling over into the manufacturing sector as well,” Goss said.
South Dakota’s manufacturing exports are also down from this time in 2023.
A big reason for this is due to the international economy. More specifically, Goss said South Dakota is hurting in part to the Chinese economy.
“But also the chief trading, one of the chief trading partners, that would be China, is really having economic difficulties. And that’s showing up in our export, particularly in agriculture and China’s just not purchasing the exports they were. You compare 2024 versus the same period in 2023, down fairly significantly in South Dakota, approximately 11%,” Goss said
Goss said this among other factors has big implications for the Federal Reserve’s decisions later this year.
“We’re gonna see a rate hike in September, that’ll be on Sept. 18 from the Federal Reserve. Now the Fed’s gonna talk about the fact that they’ve reigned in inflation. Well, they’ve reigned in inflation, but they’ve also cooled the economy down to almost-recessionary economic conditions. So, they’ve got to move to lower interest rates because of this rapidly slowing economy,” Goss said.
Goss said higher interest rates could eventually put greater pressure on South Dakota’s housing market.
