A survey of Iowa employers finds the state on a firm financial footing as the new year begins. Creighton University economist Ernie Goss says the survey of business leaders across Iowa and eight other Midwestern states reflects how a healthy farm income and expanding trade are pushing growth higher for firms across the region.
“The surveys over the last few months are pointing to a very solid 2011, at least the first half of the year,” Goss says. “We’re going to see an expanding economy.” Goss projects the growth will spill over into the Iowa’s new hiring with more than 5,000 jobs added in the first six months of 2011.
For the 12th straight month, the Creighton survey found Iowa’s Business Conditions Index was in positive territory. Goss says the Midwest as a whole is doing well, too. The leading economic indicator was up for the 2nd straight month for the region and points to continued growth.
Though the numbers aren’t as strong as they were before the recession began, Goss says the indicators all point to very solid growth. He says the weak American dollar makes U.S.-made goods cheaper abroad, which is helping manufacturing, the farm sector and related industries. Goss says much of the positive growth is tied to agriculture.
“Corn prices between $5 and $6 push up growth in the farm sector,” Goss says. “Farmers buy equipment. Farmers buy new trucks. Farmers buy fertilizer and all those things. We pick that up in our survey and that’s been looking very good.” One negative issue, high oil prices are having an impact on many parts of the economy, which Goss says will “tamp down growth.”
During 2010, Goss says Iowa recovered a large share of the durable goods manufacturing jobs it lost during the recession. Still, he says Iowa continued to shed nondurable goods manufacturing jobs, especially in food processing. Goss predicts the state will expand its manufacturing base, especially in durable goods, for the first half of 2011.