Minnesota factories grew in June but at a slower pace amid labor shortages and trade tariff woes.

The state’s index slid to 53.4 in June from 55 in May amid decreases in new orders and sales, slower delivery lead times and fresh pressures on food and other nondurable goods makers, according to a widely watched economic report released last week by Creighton University.

The nine-state Mid-America Business Conditions Index showed faster growth, with the regional index jumping to 55.4 in June from 54.3 the month before. The increase was the first since March as manufacturers reported restocking inventories and hiring more than during past months.

“The regional economy expanded at a slower pace than the rest of the nation for the first half of 2019,” said Ernie Goss, director of Creighton’s Economic Forecasting Group. “Weak farm income, produced partially by tariffs and flooding, pulled regional growth below that of the nation. Even so, based on our manufacturing survey over the past several months, I expect overall growth to remain solidly positive.”

Any index above the critical threshold of 50 signals economic growth, so economists were not alarmed by the fluctuations across the region, one that also includes the Dakotas, Nebraska, Iowa, Missouri, Oklahoma, Arkansas and Kansas.

Producers across the nine-state region previously reported being impacted by severe labor shortages, rising prices and by trade tariffs and supply chain disruptions that hoisted costs. In June, those factories again reported a slow down in imports and exports and they continued to wrestle with fierce competition for workers, a scenario that boosted wages to rise 4.8%.

Still, the regional confidence index rose to 59.1 in June from May’s 54.5. Many surveyed supply managers said operations were hurt by the trade tariffs on Chinese imports, but they also said they still supported the tariffs and hoped new negotiations might bring long term relief.

While Minnesota factory growth slowed last month, there were still positives, Goss noted.

Minnesota metal producers and other durable goods manufacturers “in the state are experiencing slight positive gains in economic activity. On the other hand, nondurable goods producers, including food processors, experienced slight negative economic conditions in recent months.”