A survey finds Iowa’s economy faltered slightly last month, showing a drop in the state’s growth rate for the first time since December. Ernie Goss, an economist at Creighton University, says the survey still indicates solid growth in Iowa for May, just a modest loss compared to the amount of growth registered in April.
Goss says the state’s leading economic indicator is an overall index which comes from the results of a survey of supply managers and business leaders across Iowa. That index, Goss says, declined "but it remains above the regional average and is remains significantly above the U.S. numbers." The average price for a gallon of regular gasoline in Iowa is approaching $3.90 a gallon, while diesel is around $4.80 a gallon statewide. Goss says that’s hurting businesses and consumers in Iowa.
Goss says many Iowa companies are seeing "fairly significant impacts" from the higher energy prices, not only in the increased costs of transporting raw materials in but also in the cost of getting finished products out to consumers. A recent report finds fertilizer costs have skyrocketed 228% in the past six years, which cuts deeply into a farmer’s bottom line — and Goss says those higher costs are passed along to the rest of us.
Goss says the food processing industry is being hurt by higher input costs and the farm sector, too, is not immune from the tough economic times as fertilizer prices go up, along with many other factors. Overall, Goss says, it was a good report for Iowa, as durable goods producers reported much stronger growth for May. He says growth was also especially strong for agricultural machinery manufacturers.