Iowa’s economy paralleled the Midwestern economy by declining slightly during November, according to a monthly survey of business leaders in Iowa and eight other states.
Creighton University economist Ernie Goss says the regional Business Conditions Index remained above growth neutral for the sixth straight month, after bottoming out in April.
“We are seeing some slower growth and we need to see more, or course, of these strong readings before we get back to pre-COVID levels,” Goss says, “and 59.1% of manufacturers reported an upturn in new orders from October to November, that’s very good and all-in-all, it was a good reading.”
On the zero to 100 scale, where 50 is growth neutral, the survey found Iowa’s Business Conditions Index remained strong, but fell to 74.6 in November from 78.7 in October. Hiring also declined, both in Iowa and across the Midwest, though he says there were hopeful signs.
“We asked about furloughed workers this month,” Goss says, “and about 52.9% of the manufacturers reported they’d hired back all of their furloughed workers.”
Since the onset of COVID-19, the U.S. Bureau of Labor Statistics shows regional non-farm employment is down 649,000 jobs, or 4.7%, and regional manufacturing employment is off by 72,000 jobs or 4.9%. Since hitting rock bottom in April, Goss says regional manufacturing has gained back roughly 37,000, or 2.7%, of the initial non-farm job losses.
“Regional employment still is down year-over-year from last year at this time about 4.6%,” Goss says. “Now, from pre-COVID levels, we’re down about 4.7%, so we’ve got a ways to go before we get back to those pre-COVID levels of growth and expansion.”
The regional trade numbers were up sharply for the month, as Goss says new export orders for the region rose to 75.0, a big jump from October’s 58.4.
“The global economy is improving a bit and that’s pushing up exports,” he says, “and then the U.S. economy, the regional economy is growing and that’s encouraging manufacturers to increase their imports from their trading partners.”
The survey shows the wholesale inflation gauge rose its highest level since June of 2018, while supply managers’ economic outlook, or business confidence, plummeted for November.