IBC executive director Joe Murphy says it’s a modest improvement. He says the overall score in overall economic outlook index rose to 41.25 — which is an increase of 3.75 points from the first quarter. That first quarter mark was the lowest point of the survey since 2009.
Murphy says this projection is a step in the right direction. “We’re optimistic that we’re seeing some sort of ascendency in our numbers as we project out the next six months. However, anything below 50 represents negative economic sentiment — so clearly we are still in that negative sentiment zone,” Murphy says. “But again, I think there are some reasons for some cautious optimism as we look ahead.”
The survey measures members’ expectations for sales, capital spending, and employment. He says the one thing that is known right now is there still remains a lot of things that are unknown about the coronavirus pandemic and its impact on business
“Businesses, whether you are a small, medium or large business, you need certainty in the markets and the economy in order to make decisions and project forward a better platform to hire and invest and to do the business that you want to do,” according to Murphy.
Murphy says Iowa’s economy was doing well before the pandemic hit — and that has helped the optimism that the state will recover. “When you look at our unemployment rate — while it is quite high, particularly for Iowa — it’s still within the top five or so lowest unemployment rates in the country,” Murphy says. “Obviously that is not to say that we are happy with where we are at. But my point is that we are able to weather economic strife better than other states. That was the case in the Great Recession, and that is the case right now.”
Most members site the unfavorable business climate due to COVID-19 and other regulatory challenges coupled with an unfavorable domestic economy as their primary challenges to business. Half of the respondents noted layoffs or furloughs as a result of COVID-19. Of those employers, 80 percent expect to rehire some or nearly all of that workforce. Sixty-percent expects to make these rehire in the coming seven to nine months with an unknown rehire date for the remaining 40 percent.
To see the whole report, go to the Iowa Business Council’s website.