Prof. Ernie Goss (Creighton photo)
The monthly survey of supply managers and business leaders in Iowa and eight other Midwest states finds the economy’s numbers slipped slightly during March, compared to February.
Creighton University economist Ernie Goss says recession warning signals have been flashing for three straight months, but there are now also signs of slow growth — while inflation continues climbing. “What I think we’re in right now nationwide is what we call sometimes called a rolling recession,” Goss says. “In other words, recessions in construction, and in other areas like finance, real estate, and also in certain states that specialize in banking and finance.”
On the 0-to-100 scale, a score of 50 is considered growth neutral, and the region’s economy fell from 56.1 in February to 50.8 in March. Iowa’s Business Conditions Index for March also fell, from February’s 53.2 to 49.4 in March, that’s below growth neutral. Supply managers across the nine states were asked about their outlook for the rest of the year, and the biggest challenges they see ahead.
“Four out of ten said supply chain disruptions. No surprise there since these are supply managers so they’re concerned about that,” Goss says. “Three out of ten said labor shortages, which was also not very surprising. Two out of ten said higher interest rates, and only one out of ten said higher inflation.”
Hiring rates for the region were relatively steady, in what Goss describes as a case of labor hoarding. “In other words, individual companies are just very reluctant to lay off workers, to fire workers, to get rid of workers,” Goss says. “They’re, in fact, hiring workers even in cases where they don’t really have that significant demand, just to guard themselves against an upturn in the economy and in their businesses.”
The report included a look back at last year for Iowa. The state’s top three exported manufactured goods for 2022 were: 1) Machinery at $4.0 billion, 2) Processed food at $3.9 billion, and 3) Chemicals at $3.0 billion.