The monthly Creighton University survey of business leaders shows the Midwestern economy saw its biggest-ever economic bounce during April.
On the zero to 100 scale, the business conditions index hit a record 73.9 for the month, its largest in almost three decades of surveys. Creighton economist Ernie Goss says the region’s economy, which includes Iowa and eight other states, has posted growth for 11 straight months now.
“This economy is moving along but it’s constrained, if you can believe that, constrained by supply bottlenecks,” Goss says. “Four out of the ten supply managers reported they were experiencing significant bottlenecks and delays in deliveries, so that’s slowing down the growth.”
Iowa’s business conditions index for April is lagging behind the region overall and rose to 67.9, up from 66.5 in March. The survey found hiring in the region sank during April, as more than one in five (22%) supply managers named finding and hiring qualified workers as the greatest 2021 challenge to their firm.
“The stimulus package that was put through by the Biden administration is having some negative impacts on the overall hiring,” Goss says, “simply because you’re paying workers more to remain unemployed rather than to get a job, and we’re going to continue seeing that be an issue going forward.”
In March and April of last year, the region lost 106,000 manufacturing jobs. Since bottoming out in April of 2020, Goss says the Midwest has added 58,000 manufacturing jobs. The economic pressures of the prolonged pandemic are appearing elsewhere, too.
“We’re already seeing higher airfares, the airlines are increasing prices on tickets and that’s being reflected in family travel,” Goss says. “Business travel, still not good. We’re seeing conferences being canceled, we’re seeing conferences being held on Zoom or on remote.”
Compared to pre-COVID-19 levels, Goss says Iowa manufacturing employment is down 4,300 jobs, or 1.9%, while average hourly manufacturing wages are 2.1% lower.