The economies of the state and region slipped again during June, according to a Creighton University survey of business leaders in Iowa and eight other states. Creighton economist Ernie Goss says it’s the third time in the past four months that the Business Conditions Index for the region fell.
“This trend that we’re on right now is not good,” Goss says. “Of course, some of that is related to the floods in this part of the country. Of course, the Missouri is flooding its banks at that’s affecting many states in this part of the country.” Goss says more than a quarter of the supply managers and merchants who were surveyed said the widespread Missouri River flooding was soaking into their business.
“We had about 26% of the companies reported that they were feeling either modest impacts or minor impacts,” Goss says. “At least 26% of the companies either through supply deliveries to their companies or sales were affected.” During the heat of summer, he says the economy is cooling off, with the blame being shared by flooding and skyrocketing energy costs.
“This economy now as we see it, the liklihood of a double-dip recession, the probability there has now increased fairly significantly,” Goss says. “I still don’t think it’s above 50% but we’re approaching 50%, so I’m very concerned.” Since bottoming out in December 2009, he says the Iowa economy has added more than 22,000 jobs for a 1.5% gain.
“Based on our surveys, I expect the state to continue to add jobs with an employment increase of more than 23,000, or 1.6 percent, for the rest of 2011,” Goss says.