The quarterly survey of an organizations that includes 20 of the state’s largest businesses shows those business executives are very positive about the economy improving in the next six months. Iowa Business Council (IBC) executive director, Elliott Smith, says the survey shows a growth in sales that is pushing up the confidence level.
Smith says they saw some good sales numbers back in 2007 and 2008 before the recession hit, and things have been steadily trending upward to a point where the last quarter they achieved a new high for sales above 2007. He says they also saw an overall high in the survey for their overall rankings, which includes sales, capital spending and employment. The found 95-percent of the C-E-O’s expect steady or increased sales over the next six months.
Smith says increased sales are the key to turning things around. He says the increase in sales gives businesspeople increased confidence that their business can be sustained and that there’s steady consumer confidence, which leads to more hiring of workers, and allows them to build or expand facilities and purchase more equipment.
Ninety-percent of the business managers expect employment to remain steady or grow in the next six months. Smith says employment is usually the last thing to move ahead as conditions improve, and that appears to be happening. Smith says the employment number is “in solidly positive territory” and has had a slow steady growth and could hit a historical high yet this year.
The survey scores the outlook for sales, capital spending and employment on a 100-point scale. Sales were at 75, six points higher than the last quarter. Employment was at 62, or three points higher than last quarter, while capital spending dropped three points to 63. Smith says there are some factors that could impact the positive outlook, including the increase in fuel prices due to the unrest overseas.
Smith says businesses depend a lot on energy prices, from manufacturing to transportation of goods around the country, so higher gas prices will eventually have an impact on industry. But for now Smith says consumer confidence has improved and the business outlook has continued to improve as well.
You can see the survey here: IBC 2011Q1 Economic Outlook PDF