The Iowa Leading Indicators Index (ILII) increased to 105.6 in March from 105.2 in February, according to a recent report from the Iowa Department of Revenue.
The report is based on a baseline figure of 100 established in 1999.
The report also showed that the monthly diffusion index decreased to 43.8 in March from a revised 62.5 in February.
The Iowa nonfarm employment coincident index recorded a .12% increase in March. Long term-trends in the ILII suggest that nonfarm employment will increase over the next three to six months, according to the report.
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.
The six-month diffusion index remained in a contractionary signal for the fifteenth month in a row, while the six-month annualized change was above a contractionary signal for the first time after thirteen consecutive months of contraction signals.
Six of the eight component indicators decreased more than .05% percent over the last six months: the agricultural futures profits index (AFPI), diesel fuel consumption, the national yield spread, new orders index, residential building permits, and initial unemployment insurance claims.
Average manufacturing hours and the Iowa Stock Market index were the only components to increase by more than .05% over the last six months.
Diesel fuel consumption was the strongest positive contributor to the ILII in March 2024, based on a 12-month moving average. Diesel fuel consumption increased 37.7% between March 2023 and March 2024. The 12-month moving average increased to 65.57 million gallons in March, from 64.14 million in February.
Diesel fuel consumption went from a detractor in February 2024 to a contributor to the Index in March 2024. The AFPI, residential building permits, and the national yield spread went from contributors in February 2024 to detractors in March 2024.
The largest detractor to the index was the AFPI. The expected profits decreased in both crop commodities and expected profits increased in both livestock commodities. Compared to last year, new crop corn prices were 16.7% lower, while soybean prices were 11.3% lower. The March crush margin for cattle increased 5.5% from February, while the crush margin for hogs increased at .4%.
