The Iowa Business Council’s survey of some of the largest companies in the state shows those employers expect the state’s economy to get worse in the next six months. I-B-C executive director, Elliott Smith, says this survey continued a negative trend that started with the last quarterly survey.
Smith says sales are going to be lukewarm, capital spending the same way, and he says employment is moving much as businesses try to hold onto what they have in human resources and get ready for a hoped upturn in the economy in six to nine months. Eleven of 19 companies in the survey expect their sales and employment numbers to be lower in the next six months and 13 of them say their capital spending will be lower.
Smith says prior to the two recent surveys — the outlook had been positive — indicating the economic downturn took a little longer to get to Iowa. Smith says just one year ago business were talking about a shortage of workers and the quarter-million extra jobs they were having trouble filling. He says companies want to stay ready to be able to gear up if the turnaround begins. While the federal government has approved billions of dollars in economic stimulus money, Smith says Iowa businesses can’t depend on that.
"Its hard to gauge exactly where the money is going, to whom and how effective it is going to be," Smith says. He says it’s hopeful that stimulus money that does come to Iowa will be put to good use, but he says it appears much of the money is going to the east and west coasts. The survey uses an index based on a 100 point scale to judge sales, capital investment and employment.
The index in this survey fell to 35.3 from 43.3 in the last quarter of 2008. Smith says the survey isn’t negative across the board as some companies are "hanging in there and doing well", but he says the number of companies doing well have gone down as traditional manufacturing and construction businesses are "stepping back from being optimistic." Any number over 50 is considered a positive outlook. To see the entire survey, go to the Iowa Business Council’s website .
