The latest survey from the Iowa Business Council shows a small movement upward in projections for the next six months for business sales, capital spending and employment. Elliot Smith is the executive director of the I.B.C., which includes the state’s 20 largest employers.
Smith says the increase wasn’t a huge jump, but it didn’t move down. "We’re hopeful that business in Iowa has seen something of a bottom here with the negative economic news lately and we’re hoping that the next six months at least show a stable economy," Smith says.
The overall business index moved up to 38.3 for the second quarter, which is three points higher than the first quarter of this year. Any number below 50 is considered a negative outlook. The index was at 64.3 last year for the same quarter.
Just 10% of the businesses expect to hire more people in the next six months with 40% expecting to stay the same, and 40% expecting to see a drop in employment, and 10% expect a substantial drop in employment. That leaves the overall rating for employment up just one point compared to the last survey. Smith says the jobs index is the last one they expect to see turn around.
Smith says most of the business council companies have used layoffs as a last result and have "gotten very creative" in managing work schedules to avoid the layoffs. He says they businesses will ramp their current workers back up to full schedule before adding employees. The index for sales move up six points, which Smith says is a good positive for turning things around.
Smith says each of the numbers in the three categories is still in the negative category, but he says the fact that the sales figure has moved up is something that can lead to increased capital spending, and eventually snowball into the hiring of more employees. Smith says Iowa’s economy has been able to continue faring better than the national economy. He says though there is an impact when big companies like General Motors declare bankruptcy.
Smith says employment is likely to see an impact, depending on how many Iowa dealers shut down. Smith says Iowa hopefully won’t loose too many dealers, as he says there are 20 to 30,000 jobs with G.M. at stake in Iowa, and he says that would ripple down the supply chain too. You can see the entire survey on the Iowa Business Council’s website.