A monthly survey of supply managers and business leaders in Iowa and eight other states finds the economies in Iowa — and the Midwest — slowed during April.
Creighton University economist Ernie Goss says the regional economy is still in the “healthy” category but dropped from being considered “very strong” in March. Goss says much of the blame goes to supply chain disruptions.
“Four out of ten supply managers expect those supply chain disruptions to get worse,” Goss says. “Now, only one to five expect them to get better, and of course that leaves another four out of ten that expect those supply chain disruptions to remain the same.”
The prices consumers are paying for most goods remain high and the survey results indicate things likely won’t be improving anytime soon. “Inflation is still strong. That’s what we’ve seen and that’s what we’re going to continue to see,” Goss says. “The April number’s at 89.7. Again, these indices range from zero-to-100 and 89.7 is quite strong. I will call it excessive inflationary pressures, but it is down from March’s 95.5.”
Long-term interest rates will likely be going up a full percentage point, Goss predicts, which will have far-reaching ripple effects.”Of course, that’s going to slow the housing sector more than what we’re seeing right now,” Goss says. “The housing sector has been going gangbusters. These higher mortgage rates are going to slow that growth in prices and we’re going to see the housing market slow down a bit, but still in a positive range.”
The survey shows Iowa’s Business Conditions Index for April sank to 69.8 from 75.6 in March, again on a zero-to-100 scale. For the nine-state region, the overall index showed a “still healthy” 65.9 for April, down from March’s “very strong” rating of 71.3.