The Iowa Leading Indicators Index (ILII) decreased to 107.6 in March, a decline of .7% from 108.3 in February, according to a report from the Iowa Department of Revenue.
The monthly diffusion index decreased to 6.3 in March from 43.8 in February.
The Iowa nonfarm employment coincident index recorded a 0.12% increase in March, the twenty-fourth month of growth. Long term trends in the ILII suggests that nonfarm employment will decrease over the next three to six months.
The ILII was constructed to signal economic turning points with two key metrics that when seen together are considered a signal of a coming contraction: a six-month annualized change in the index below -2.0% and a six-month diffusion index below 50.0.
The six-month diffusion index remained in contractionary signals for the third month in a row whereas the six-month annualized change remained below the contractionary threshold for the fifth month in a row. Six of the eight component indicators decreased more than 0.05% over the last half-year: Agricultural futures profits index (AFPI), diesel fuel consumption, the Iowa stock market index, national yield spread, new orders index, and residential building permits. The decrease in the six-month diffusion index was due to the Iowa stock market index decreasing more than 0.05%.
The report also indicated:
- The 12-month moving average of weekly manufacturing hours increased to 39.35 in March from 39.34 in February. In March, average hours were 39.2, above the 39.1 hours in March 2022.
- The Iowa stock market index, the national yield spread and residential building permits went from positive contributors to negative contributors.
- Diesel fuel consumption decreased 18.1% between March 2022 and March 2023. The 12-month moving average decreased to 66.54 million gallons in March from 67.37 million in February. March 2023 was the lowest reported gallons of diesel fuel consumption since March 2009.
- The Iowa Stock Market Index experienced widespread loses through 25 of the 28 stocks included in the index and the new orders index remained a negative contributor due to the 12-month moving index despite a monthly increase from February to March.
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