Iowa’s economy had one of its worst showings in years during August, according to a monthly survey of supply managers and business leaders statewide. Creighton University economist Ernie Goss says Iowa’s numbers were the lowest they’ve been in months and were also the lowest among the nine Midwest states surveyed.
Goss says the Iowa economy will see pull-backs over the coming months, in part due to the "hangover" from the June flooding, but also from the higher energy prices. Iowa has traditionally been one of the Midwest’s leaders on the Creighton survey and Goss says it’s been something of a surprise to see the state’s numbers fall so deeply in recent months.
He blames both the weather and high energy prices, as input costs are hurting farmers and livestock producers and that’s spilling over into other industries. Goss says the situation in Iowa appears to be more dire in rural areas than in metropolitan areas, while certain industries are seeing growth scaled back, like in durable goods manufacturing, especially in businesses with ties to automaking.
He says Iowa’s large transportation/trucking industry is suffering under the higher energy prices, especially diesel, while the economy is slowing and pulling back growth. Goss says he expects a turnaround in the months ahead, calling this survey’s pronounced downturn "a hiccup for Iowa."
As for the Midwest, Goss says the regional economy has begun to mirror the national economy with weak, but positive, growth in addition to job losses. While the inflation gauge was down for the month, he says "it is still telegraphing excessive inflation in the pipeline."