This holiday shopping season is the busiest time of the year for many Iowa merchants but a survey of business leaders here and in eight other Midwestern states shows the economy is still sluggish.
Creighton University economist Ernie Goss says the November figures for Iowa’s overall Business Conditions Index dropped again, while the region’s numbers are slowly rising but are still weak.
“This is the 5th straight month below growth neutral,” Goss says. “I’m sure a lot of you folks are saying, ‘What the heck is going on? Everything looks good to us. We’ve had a presidential election and everybody’s on fire.’ Well, the economy in this part of the country, at least the manufacturing economy is not on fire. In fact, we’re losing jobs.”
In the past year, Goss says the region has lost 16,000 manufacturing jobs, while it’s gained 102-thousand non-manufacturing jobs. The survey also shows the Midwest is lagging behind the nation in leading economic indicators.
“It’s up but still well below the national (rate),” Goss says. “Why below the national? Because agriculture, manufacturing and energy are more important in this part of the country and all three of those sectors are not doing well and as you know, oil prices still can’t get above 50, at least they haven’t recently.”
The survey’s regional employment gauge shows the nine-state manufacturing sector continues to lose jobs, as the index fell below growth neutral for the sixth straight month. On a scale of zero to 100, growth neutral is 50, and the job gauge fell to 42 in November, down from 44 in October.
“We’re just not getting any traction in jobs,” Goss says. “A lot of it has to do with not enough qualified workers. A lot of these businesses, they can’t take every Tom and Nancy that shows up at their company, they need skilled workers, whether it’s truck drivers, whether it’s welders or whether it’s electricians.”
Specifically for Iowa, Goss says both durable and nondurable goods manufacturers are experiencing “pullbacks” in economic activity. One part of the survey showed promise: the November business confidence index. Looking ahead six months, that number soared to nearly 62 from what Goss says was a frail 40 in October. One supply manager said, “So glad the election is over. Let’s go to work.”