Economic recovery from the pandemic further accelerated in Iowa during May, but the numbers fell slightly for the Midwest region, according to a survey of business leaders and supply managers in the nine states.
Creighton University economist Ernie Goss says the April numbers showed record growth and while Iowa continued to display its momentum to dig out, the region’s progress slipped a bit.
“While the trend is strong, we’re still not back to pre-COVID levels, but boy, we’re moving in that direction,” Goss says. “The overall readings are very strong, held back by supply bottlenecks. Nine out of ten supply managers reported supply bottlenecks, four out of ten reported significant supply bottlenecks.”
Almost one-third of supply managers identified soaring input prices as the greatest economic challenge of the year for their firms. Even with a surging manufacturing sector, Goss says Midwest manufacturers added jobs at only a modest pace.
“We had shortages of qualified workers,” Goss says. “We’re still about 4.2% below pre-COVID levels. The U.S. number’s about 5.4% below pre-COVID levels.” As pandemic restrictions begin falling, Iowans are starting to make travel plans, though many of them may be stunned by the airfares they’re seeing as high demand is quickly driving up prices.
“Vacation travel is going to be very, very strong this year,” Goss says. “Transportation prices, that would be airline prices, are moving upwards. We’re seeing some very high increases in prices for vacation traveling. Business travel is not as strong. That’s going to remain weak throughout 2021.”
The survey points to very strong growth for the next three to six months and Goss projects the Midwest region’s economy will be back to pre-COVID levels in the first quarter of 2022.