The economic picture is brightening for both Iowa and the Midwest. Creighton University’s August survey of supply managers and business leaders across the nine-state region finds the financial situation slowly improving.
Creighton economist Ernie Goss says the survey’s Business Conditions Index, a leading economic indicator for the region, climbed on the zero-to-100 scale, where 50 is growth neutral. “The index from that survey rose to its highest level in two years. In fact, it was well above growth neutral at 60.0 and that’s up from July’s number of 57.4,” Goss says, “so it was a good reading.”
Iowa’s Business Conditions Index continued inching above growth neutral for the month. The reading climbed to 56.4 in August from 50.9 in July. Goss says the survey found manufacturing is steadily picking up, but still hasn’t fully recovered from the downturn caused by the coronavirus pandemic. “Even despite the increases that we’ve seen over the last couple of months, we’re still below levels of production and overall economic activity in the regional manufacturing sector,” Goss says. “We’re still not back to pre-COVID levels but we’re moving in the right direction.”
The unemployment rate for the nine-state region hit a high of 9.7% in May and has fallen in the new August survey to 5.8%, but Goss says there’s still trouble with hiring. “Four out of five of the manufacturers reported finding and hiring qualified workers restrains growth in the region in their companies,” Goss says. “Even despite the higher levels of unemployment, we’re still seeing companies having difficulties finding and hiring those qualified workers to fill open positions.”
A report from the U.S. Bureau Labor Statistics says the region has lost about one-million jobs since the onset of COVID-19, for a 7.3% decline. The same report shows since the pandemic, Iowa has lost about 6,000 jobs, a drop of 2.7% for the state, with transportation equipment manufacturing accounting for a large share of the losses.