The economies in Iowa and the Midwest improved, slightly, during January, according to Creighton University’s monthly survey of business leaders and supply managers in Iowa and eight other states.
Creighton economist Ernie Goss says the Business Conditions Index is a leading economic indicator for the nine-state region, based on a zero-to-100 scale where 50 is considered growth neutral.
“The overall reading was up slightly, now it’s up to 50.9 and that’s from December’s 50.3,” Goss says. “I won’t say that’s great news, but it’s better news than I was expecting.”
Iowa’s overall economic index showed a relatively modest increase from 49.7 in December to 51.8 in January. Supply managers were asked about what they see as the greatest threat to their operations during the coming six months, and he says some of their answers were routine, while others were a surprise.
“Twenty-two percent said recession, now, that’s pretty much expected,” Goss says. “Twenty-one percent see finding and hiring workers is still an issue, 17.4% said higher input prices, and 4.4%, and that’s a small percentage, said tariff and trade wars.”
Hiring during January was, in a word, bad — according to Goss. The hiring rate fell to 39-point-one for the Midwest, well below growth neutral, but he notes there are diverging reasons being given for the cause.
“Twenty-six-point-one percent of the supply managers reported job losses for the month, and 43.5% reported a shortage of job applicants, so there’s some mixed messages in there,” Goss says. “Thirteen percent said they were not hiring due to the economic slowdown, so all in all, it’s showing that the labor market’s still tighter than I would have expected.”
According to U.S. International Trade Association data, Goss says Iowa’s manufacturing exports expanded from $14.1 billion for the first 11 months of 2022 to $15.1 billion for the same period in 2023, representing a growth rate of 7.0%.