A survey of Iowa business leaders and supply managers finds the state bucking the regional trend by posting economic improvements during December.
Creighton University economist Ernie Goss says the Hawkeye State showed its best numbers since June, but he adds, the outlook for Midwest isn’t nearly as rosy.
“This economy is slowing down, that’s slowing growth and we’re seeing it in almost all of the nine states in the region,” Goss says. “Our leading economic indicator for the month of December is below growth neutral for the fifth time in the past six months.”
While legislation passed in Congress this week to reverse the so-called fiscal cliff of higher taxes and budget cuts, Goss says it’s too little, too late, and the lack of progress in Washington made many business owners skittish.
“There is a lot of what I would call economic craziness out there,” Goss says, “and a lot of it’s coming about because of some bad legislation and a lack of any leadership, either from the president or from Congress.” New elements of the federal health care reform act are taking effect in the new year, which Goss says has forced some Midwestern business owners to take extreme measures.
Goss says, “We’re having reports of businesses in the nine-state region dividing up into two companies so they’re not subject to health care reform laws which go into effect for those who are over 50 and above in terms of employees.” In the last year, Goss says the Iowa labor force shrank by almost 22,000 workers.
With job growth and a reduction in the size of the labor force, Iowa’s unemployment rate has continued to fall. Since the national economic recovery began in July of 2009, Iowa has added more than 20,000 manufacturing jobs. Goss says Creighton surveys over the past several months point to very moderate overall job gains with slight manufacturing job losses for the first half of 2013.