A survey of Iowa’s business leaders and supply managers finds economic conditions took a nose dive into floodwaters during June. Creighton University economist Ernie Goss says it was one of Iowa’s worst months in years.
"For the month of June, we saw the largest decline in Iowa that we’ve recorded since we began the survey back in 1994," Goss says. "Of course, a lot of that can be traced to the flooding that we’ve seen." Governor Culver declared 84 of the state’s 99 counties disaster areas due to widespread flooding during June.
The flooding slowed and temporarily closed some Iowa businesses during the month, and while there’ll be a boost as rebuilding begins, Goss says it may not offset the physical and economic damage that’s been done.
"We will see some bursts of economic activity, particularly for the insurable losses when the insurance money flows in, but on the other side, we’re likely to see some folks that just will not rebuild, in fact, they’ll out-migrate," Goss says. "There’s not going to be a lot of that but to some extent, you will see some out-migration.
You will see some businesses that just do not rebuild." Iowa is the nation’s number-one ethanol producer and he says fluctuations in the commodities markets are taking a toll on that industry too. Goss says, "Corn-based ethanol producers, with these higher corn prices, we’re seeing some of the ethanol facilities that were coming online are just being delayed and in some cases, some of those ethanol producers are being taken off line, at least temporarily, due to these very high record corn prices."
He says Iowa firms that were not directly affected by the floods were indirectly and negatively influenced by June’s weather in other ways. "Transportation bottlenecks and infrastructure outages continue to be a significant negative for many firms in Iowa," Goss says. "Prior to weather-related business interruptions, Iowa firms had been clearly outperforming those in the rest of the region."