OMAHA, Neb. (AP) - A regional economic survey for April puts the Midwest economy at its strongest since 2004, despite higher energy prices and interest rates.

"Even with the Fed's foot on the brakes, and rapidly rising energy prices, the regional economy continues to expand at a breakneck pace," Ernie Goss, a Creighton University economics professor, said Monday.

But higher commodity prices and interest rates should push down regional growth significantly in the second half of 2006, Goss said.

The Mid-America index is based on a monthly survey of supply managers and business leaders in nine states. The overall index for April rose to 66, up from March's 63.6 and February's 59.9.

The index is at its highest level since June 2004, according to the survey.

The overall index, called the Business Conditions Index, ranges between zero and 100. An index of 50 or greater indicates growth.

North Dakota's overall index declined to 67.7 from March's 69.9, but was up from February's 61. The state added 1,400 jobs in the first quarter for an annualized rate of 1.6 percent, Goss said. Based on the survey, he expects North Dakota to gain about 1,000 jobs in the second quarter.

The regional employment index hit 64.5, another high since June 2004. It's up from March's 58.5 and February's 58.4.

"This growth will put further pressure on the Fed to raise short-term interest rates beyond those currently anticipated by the market," Goss said.

The nine-state region - Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota - added 73,200 jobs, Goss said.

But higher interest rates, increasing energy prices and softer farm income will begin to slow growth in the third quarter of this year, Goss said.

"I place the likelihood of Federal Reserve rate increases at 99 percent at its May meeting, and more than 70 percent likely at its June meeting," Goss said. "The higher short and long term interest rates have failed to slow even construction in the region, as individuals and businesses undertake projects in anticipation of even higher rates."

The prices paid index for April rose for the second month in a row to 79.1 from March's 78.6 and February's 74.3.

Higher interest rates and energy prices also didn't affect business confidence. That index increased to 63.7 from March's 60.4.

The confidence index gauges the economic outlook of survey participants for the next six months.

"Much like national consumer confidence, our regional confidence numbers fly in the face of expectations," Goss said.

New export orders rose to 59.2 from March's 56.6 and February's 52. Imports also increased to 61 from March's 60.4.

Other factors in the overall higher index for April were: new orders at 69, up from 68.5; production at 69.8, down from 69.9; and inventories at 60.8, up from 56.9.

April delivery lead time index was 59.0, its highest since September 2004. A delivery lead time index above 50 indicates potential shipping and delivery delays, and normally precedes upward pressures on prices in the near term.