A survey of business managers in Iowa and eight other Midwestern states finds two-thirds of those questioned say international trade tariffs are hurting their bottom lines.
Creighton University economist Ernie Goss says despite strong manufacturing job gains, the Business Conditions Index fell for the third straight month for the region, while Iowa saw a boost. “The overall index was down from 54.9 to 54.1 and that’s the lowest reading we’ve recorded since President Trump took office,” Goss says. “Things are moving toward slowing down.”
The survey found the November Business Conditions Index for Iowa expanded to 52.8 from 51.8 in October. While the region’s numbers have been falling, Goss notes they’re still above growth neutral and have been for 24 straight months. That means the regional economy is still growing, but slowing. Goss says the national picture is similar.
“The U.S. economy is slowing down, the regional economy is slowing down even more,” Goss says. “Of course, this part of the economy is more dependent on agriculture, more dependent on trade and those are the areas where we’re seeing some real softness for the month.” The summer driving season is long since over, and lower demand means lower prices, and Goss says lower oil prices pushed the regional inflation gauge lower.
Business managers were asked to rate their confidence about profitability in the year ahead. “About 30% said higher, a little less than one-third, and 11% said lower and the remaining 59% said they’d expect no change,” Goss says. “Even though our numbers are showing some softness, they are looking at their own businesses and seeing it doing better.”
While the overall numbers sank for a third straight month, Goss says they continue to point to positive economic growth for the next three to six months. In the past year, Goss says Iowa’s nondurable goods manufacturers added 3,100 workers for a 3.3-percent gain. That makes Iowa the number-three state among the nine states in terms of the rate of growth. During the same period, durable goods producers in the state boosted jobs by 6,100 for a 4.9-percent gain. That moves Iowa to number-four among the nine states in terms of the rate of growth.