The April survey of business managers in Iowa and eight other Midwestern states predicts solid economic growth for the region over the next three to six months, though Iowa’s economy is slowing.
Creighton University economist Ernie Goss says labor shortages pushed the overall business conditions index lower for the month, though the figures remained in positive territory. “Because of difficulties in finding and hiring qualified workers, which is the number-one factor slowing growth among the firms,” Goss says. “About 45% of the supply managers indicated that was the chief, the largest concern they have about growing their business for the next 12 months.”
While the nation’s economy grew just over three-percent last month, Goss says our region’s economy grew at about half that rate. Crude oil prices fell during April to around $62 a barrel, which translates to good news for businesses that rely on ground transportation. “If they should head higher, $70 a barrel, that depends a lot on Iran and our trading partners, our allies, whether they move to continue or at least restrict purchases of Iranian oil,” Goss says. “That would mean, of course, supply restrictions and prices would move upwards.”
While the region’s business conditions index has been above growth neutral for 29 straight months, Iowa’s index fell during April. The index ranges from zero to 100 with “growth neutral” at 50. Goss says Iowa’s index dropped from 57.8 in March to 48.9 in April, pointing to a slowing state economy.