Creighton University economics professor Ernie Goss says the Midwestern agricultural sector is now in a “significant recession,” and the region’s economic picture is lagging.
Creighton’s monthly survey of business leaders and supply managers in Iowa and eight other states finds the overall Business Conditions Index fell below growth neutral during September — for the fifth time this year.
“The regional manufacturing sector is slowing down, negative growth right now, but only slightly negative, much like the U.S. number,” Goss says. “The U.S. number, manufacturing has been losing jobs, 33,000 jobs lost at the national level since the beginning of 2024.”
On a scale of zero-to-100, a score of 50 is considered growth neutral, and the Midwest economy showed a score of just over 48 last month. Iowa’s score was even lower, dropping about a point from August to just above 43 for September, indicating the state’s economy is significantly slowing.
Goss says the survey asked about the biggest roadblocks that lie ahead for the region’s manufacturers.
“Interestingly enough, 39.1% of the supply managers said that higher inflation was their number-one challenge going forward,” Goss says. “Of course, that’s not good from the Federal Reserve standpoint, and the second greatest challenge was supply chain disruptions.” Other challenges they mentioned include continued high interest rates and China’s threatened invasion of Taiwan.
With America’s general election just over a month away, we’re hearing a lot about whether the economy is in a recession. From his standpoint, Goss says it’s a complicated answer.
“The overall economy is not in a recession,” Goss says, “however, certain sectors are in a recession, and I would argue right now that the manufacturing sector is in a slight recession, and the agricultural sector is in a fairly significant recession.”
The survey shows the region’s employment index slumped below growth neutral for a ninth straight month, while looking forward, supply managers expect input prices to rise more than six-percent over the next year.
According to the latest U.S. Bureau of Labor Statistics report, Iowa lost 3,800 manufacturing jobs, or about two-and-a-half percent, so far in 2024.