A monthly survey of businesses in a nine-state region that includes Iowa shows growth has dropped into negative territory for the first time in nearly two years. Creighton University economist Ernie Goss says the overall Business Conditions Index dipped to 49.9 in October, compared to 52.2 in September. A survey score above 50 suggests growth.
Goss notes the October score is just below a “growth neutral” score of 50. “But, it is below growth neutral, so this is signaling that growth in the months ahead is not likely to be good,” Goss said. “In fact, we’re now seeing the regional economy – the economy that we survey – is being negatively affected by the national economic malaise.”
Goss said, for now, he chooses to use the word “malaise,” rather than “recession,” when describing the current U.S. economy. “We economists said the recession ended in June of 2009. All other human beings, they’re saying, ‘it didn’t end.’ Well, we say it did. So, let’s call it a malaise…the economic malaise that began in July of 2009,” Goss explained.
He said one reading below 50 doesn’t signal a recession, but if the overall index continues to trend downward, the region will once again be in a recession. Goss says one positive is the agriculture sector is “moving ahead at a solid pace” and that’s spilling over to other sectors of the Midwest economy.
“For example, in Nebraska and Iowa, you’ve got agricultural equipment manufacturers – the John Deeres…and then you’ve got the ‘softer side’ – the Monsantos. All of those businesses are going gang busters right now and doing very well,” Goss said. But, he anticipates that ag growth will be trimmed downward in the months to come. The states included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
Goss said only Missouri, Kansas and Arkansas are showing job losses. The other states have been showing job gains in recent months.