The Iowa Business Council’s latest survey of some of the state’s largest businesses shows a drop in all three economic indicators. The survey tries to gauge the outlook for 19 of the state’s largest businesses for sales, capital investment and employment on a 100 point scale.
I.B.C. executive director, Elliott Smith, says the largest declines came in the projected capital spending and employment. Smith says what had previously been moderate or somewhat positive outlooks are now expected to be softer in the first six months of this year. Smith says this fourth quarter economic survey is the first to really reflect the downturn seen across the rest of the country.
"Our companies here in Iowa are really efficient, well-run, lean companies, and have managed to do well enough in this sort of climate and environment previously to maintain positive numbers in our most recent surveys and I think you’re seeing the sort of extended nature of this downturncoming home to roost, so to speak, here in Iowa," Smith says.
Capitol spending saw a 24-point drop in the survey from the last quarter, with more than half of the companies expecting to decrease their capital spending. Smith says that’s probably the easiest area to take a look at, as companies can delay buying new equipment or building new buildings. The employment index also showed a 24-point drop, with slightly more than half of the companies expecting to increase employment.
The outlook for sales dropped only 12 points in the survey index from the last quarter, with 63-percent of the businesses expecting increasing or steady sales. Smith says the sales numbers mirror some other news heard recently — such as stronger than expected retail sales this past weekend. Smith says this may be something positive for businesses to hang their hats on and a hope that the downturn might be shortlived as the new year progresses.
Smith says there are still a lot of unknowns about all the federal economic plans and how long the economic downturn might last. Smith says they’re putting their hope and faith in the economic experts and hope they’re putting the money in the right place to help the economy recover, and he says Iowa’s businesses will do all their best to hold up their end.
Smith says since the survey tries to look out six months ahead, the next survey in March will be a key to determining how long the downturn might last. To see the entire survey, to the the Iowa Business Council’s website .