A survey finds Iowa’s economy is slowly recovering from the pandemic, but the state is lagging behind the Midwest overall in clawing back from widespread shut-downs and job losses.
Creighton University economist Ernie Goss says their survey of business owners across the nine-state region found a Business Conditions Index of 50.3, where 50 is considered “growth neutral” on the 0-to-100 scale.
“It’s a good number,” Goss says. “It makes us feel a little bit better, but it certainly indicates there are many, many, many challenges and we’ll have to see many, many more months of above-growth neutral readings to get back to pre-COVID-19 levels.” Iowa’s economy is still below growth neutral at around 47 for June, an improvement from just 42 in May.
The Jobs Index for the Midwest is also still in negative territory, he says. Again, using the zero-to-100 scale, that indicator fell to just 39 during June. “Even with the numbers at least moving above April’s record low reading, we’re still down about 1.2 million jobs in the region,” Goss says. “In most of the states, we’re hovering around 9% loss of jobs since COVID-19.”
Since the onset of the pandemic, Goss says Iowa has lost 161,000 jobs, or about 10-percent of its employment. He says the surveys point to a flattening of employment with only slight job gains in Iowa in the months ahead. The Creighton survey found more than half (51%) of businesses surveyed plan to make -no- staffing changes for the rest of 2020.
“Seventeen percent of the businesses and manufacturers said they would bring back furloughed workers,” Goss says. “Twenty-six percent said they’d bring back furloughed workers -and- make new hires, and six-percent indicated they would continue layoffs, so that’s the bad news.”
Goss says a survey of bankers estimated farmland prices fell by four-percent in the past year and they expect those prices to fall by another three-point-two percent over the coming year. About one-fifth of bank CEOs surveyed expect low farm income and falling farmland prices to present the greatest challenge to banking operations over the next five years.