ABI graph on prospects for capital spending.
The president of the Iowa Association of Business and Industry says he’s excited by what he sees in a survey of members on what they expect in the first quarter of the new year.
ABI President Mike Ralston says the survey results are positive in almost every area.
“The manufacturers who responded to the survey expect pretty good things in the first quarter of 2021,” Ralston says. Around half of the 1,500 member businesses are in manufacturing and they expect increased sales, and employment.
Ralston says the expectations are based on two things. “First is that they are trying to keep up with all their inventory issues, because of supply chain issues and other things they haven’t been able to maintain the kind of inventory they would like, so they have to produce more,” according to Ralston. “Second, they just expect orders to be up, they expect business to be up — and so that means that they’ll have a better quarter — so we are looking forward to it.”
More than 90 percent expect sales to increase or stay the same, and less than ten percent expect them to drop. The COVID-19 vaccine is now being delivered — but Ralston says that was an unknown when the businesses took the survey.
“When the survey was conducted, clearly the news was that it was likely that vaccine would be coming in the next 30 to 60 days — but that was not known for sure — so that’s just gravy.”
Ralston is especially excited about the capital investment question on the survey.
“I think one of the most amazing things that came out of that survey is that almost 70 percent of those responding say that they intend to make a capital expenditure in the first quarter of 2021,” according to Ralston. “Pandemic notwithstanding, that’s a major new piece of equipment, that’s a plant expansion, that’s good for those companies, that’s good for the communities that they are in, it’s great for their employees. That’s a big number, it’s exciting to see that.”
He says it really shows the confidence businesses have. “They don’t make a capital expenditure lightly. That’s something they really believe is going to lead to a stronger business and good things for their company and their community. So that’s a big deal for Iowa,” Ralston says.
He says the only negative continues to remain a lack of workers to fill jobs. Ralston says it’s interesting that so many parts of the country have huge numbers of unemployed people and he says they should come to Iowa. “It doesn’t matter how big the company is — where it is located in the state or what they make — they are looking for people. There are great jobs available in Iowa and I am not talking a dozen — we are talking hundreds if not thousands — so I hope people come here,” Ralston says.
The survey found 52% of businesses expect their employee numbers to grow in the first quarter.
