A quarterly survey on the plans of some of the state’s top business leaders shows optimism for the remaining months of this year. Iowa Business Council executive director, Elliott Smith, says they survey tracks sales, capital spending and projected employment.
“We set new highs in two of our indices — sales and capital spending — we matched a high in employment and our overall number, which is a cumulation of the three indices reached new high as well,” Smith says. “We didn’t storm to new levels, we’ve been making our way gradually over the last 4 or 5 quarters to this point. But, all indications are for the rest of the year business wise in Iowa, expectations are good.”
Elliott says the business leaders feel they’ve come out of the area where they had to become lean and weather a down economy. “We’re really now just getting back to levels that we saw five quarters ago, the first part of 2011 we were having the same sort of steady march up to new historic highs. And then we ticked back a quarter or two, and now we’ve reassumed the high ground,” Smith says.
As they have in past I.B.C. surveys, the numbers show optimism, but also caution. “It’s been good sustained growth, we’re not seeing huge leaps and I think that’s good,” Smith says. “It means we’re not really in an erratic pattern here, we’re seeing good measured growth over several quarters now.”
The survey measures the outlook of the business leaders on a 100-point scale — with anything over 50 considered positive. The sales index was at 73, as 100% of the C-E-O’s expect steady or increased sales in the next six months. The employment index was at 63, two points ahead of the last survey three months ago and the same as it was last year.
The index that gauges capital spending was up two points from the last survey at 69, and is five points higher than the same time last year. Ninety-five-percent of business leaders expect to invest more in capital.
Smith says there are several factors that will impact how much the optimism grows as this year runs out and a new one begins. The national election in November, the possible expiration of tax cuts, and the Supreme Court’s action on the health care law all are issues that could impact the outlook of businesses for 2013, according to Smith.
There are also factors outside the U.S. that may make a difference for the economy. “There’s always the international picture too…every day or so we seem to hear about new governments that are having issues with their own budgets and debt. Certainly there are some variables out there that could influence things come 2013. As far as 2012, I think we’re still feeling good about prospects out there,” Smith says.
You can see the complete report on the I.B.C. website: www.iowabusinesscouncil.org.