The new survey of business leaders and supply managers in Iowa and eight other Midwestern states finds the economy is growing stronger and more robust.
Creighton University economist Ernie Goss says the monthly Business Conditions Index, a leading economic indicator, has risen for five straight months.
“This index is very strong and it’s much stronger than what we’re seeing in the national economy,” Goss says.
“What’s driving a lot of it is exports, agriculture and energy. Actually, energy is contributing to the growth in this part of the country, so it was a very good report.”
Higher energy prices are having a larger, negative impact elsewhere in the country but not as much in the Midwest, Goss says. The housing sector, too, is hurting other areas of the nation but it’s seeing a pickup here in our region. “Of course, you’ve got agriculture and exports which are really continuing to be strong,” Goss says. “For example, agricultural equipment manufacturers. If you’re making products, manufacturing goods for the farm, you’re doing very well. Even on the non-equipment side, the Monsantos, the softer side of the agricultural providers, doing very well.”
For the Midwest region overall, Goss predicts the unemployment rates will continue to drop over the coming weeks, but he is noting a growing problem in several states, including Iowa. “We’re seeing supply managers out there reporting they’re having a difficult time finding and hiring skilled workers,” Goss says.
“This is skilled workers, not unskilled workers, particularly in durable goods manufacturing, that would be heavy manufacturing.” For the 27th straight month, Iowa’s Business Conditions Index remained above growth neutral. “Both durable and nondurable goods manufacturers in the state are adding jobs at a healthy pace,” Goss says.
“Manufacturers tied to agriculture and dependent on sales abroad are experiencing especially strong growth.” As a result of the solid expansion, Goss says he expects Iowa’s unemployment rate to move below 5%, for the first time since 2008, by the middle of 2012.