A quarterly survey of the state’s largest businesses released today predictably plummeted after months of positive news.
Iowa Business Council executive director, Joe Murphy, says their overall economic outlook index fell to 37.5.
“At the end of 2019, we were at just over 60 for our score for the economic outlook. Anything above 50 represents a positive feeling about how our economy is doing,” according to Murphy. “And as we obvious now most certainly know, things can change in an instant.”
The IBC has 22 members representing many of the top decision-makers at major Iowa employers. Murphy says the drop has to be considered in the context of the coronavirus. “That’s something that is very concerning — but I think the fact remains that Iowa companies and Iowans, in general, are very resilient. We’ve weathered financial crises in the past. Most recently in 2008-2009….we’ve weathered two 500 year floods in a two-year period, and we’ve also weather farm crises,” Murphy says.
He says right now companies are doing what they need to do to get through the pandemic. “Our member companies are doing everything they can, not only to protect the health and well-being of their employees but also protecting the health and well-being of their clients and customers,” Murphy says. “And also trying to figure out ways in which they can positively contribute to the effort — whether it is providing PPE equipment, whether it is providing monetary donations to relief funds — this is a community effort right now. Iowa businesses will step up to that challenge.”
He says businesses were in a good spot heading into the pandemic, and the biggest thing facing them now is the uncertainty of how long it will last. “Our survey asks questions about what is their level of optimism with respect to sales, capital spending and employment throughout the course of the next six months — and so that is why our sentiment is quite negative — because we don’t know what this endpoint will be,” Murphy explains.
Heading into the pandemic the biggest concern for businesses was finding enough qualified employees in a time of record-low unemployment. Murphy says that will still be a problem once restrictions are lifted. “But it is sort of a different lens looking at the issue right now as we look to see what the future of work will be in the state in the short and long-term, but also how can we retain the people who are doing such a great job for us now — so that they are ready, willing and able to contribute to this recovery whenever we get to that point where we can ramp up production and other services,” Murphy says.
He says the federal government action thus far is a positive for business. He says the three phases of the recovery act passed so far by Congress will help, and he says there is talk of a fourth phase coming in the near future. The Economic Outlook Survey has been completed by IBC members on a quarterly basis since 2004 to gauge projected trends for the state, which can be used for business and economic planning.