Iowa’s economy slowed slightly during August compared to July but is still strong, according to Creighton University’s monthly survey of supply managers and business leaders statewide. Creighton economist Ernie Goss expects Iowa’s economy to continue growing during the months ahead, but the rate of growth will likely slow.
Goss says, "What we’re seeing in Iowa is very good farm income is propelling growth forward. Furthermore, the ethanol-biofuels production is having some real positive impacts. We saw some negative numbers coming out of transportation, equipment and parts manufacturing in Iowa but when you put it all together, it was a pretty good report."
Goss says the numbers for August of 2007 resemble those from August of 2000, just before the recession hit. He says he wouldn’t be surprised if the Federal Reserve Board cuts interest rates when it meets later this month.
Goss says, "Job creation for the region is down significantly, the lowest number we’ve seen in more than four years. Given the fallout from the mortgage crisis, the housing downturn, we’re likely to see a rate cut on September 18th and I think what that’s going to indicate in the future is we’re going to see slower growth but those interest rate cuts are going to help out."
He says the survey points to additions in employment in Iowa in the months ahead, adding, durable goods producers reported much stronger business activity than nondurable producers in the state, while food processors experienced unexpected growth for the month.