The state’s economy saw slight improvements during February but remains sluggish, according to Creighton University’s monthly survey of supply managers in Iowa and eight other states.
Creighton economist Ernie Goss says the overall Midwest region is seeing greater strides than Iowa alone, though both economies are still ailing.
“It’s looking much better. Well, much better is too strong a word. It’s up for the month, and of course, this is moving in the right direction,” Goss says. “It’s the highest level since April of 2024 so the manufacturing sector is looking better, but not significantly better.”
The survey is based on a zero-to-100 scale where 50 is growth neutral. The overall score for the Midwest was 52, up from 51.1 in January, while Iowa’s February score was 44.5, an improvement from January’s 43.1 but still below growth neutral.
Goss says the survey found threats to international trade by the Trump administration are considered the biggest challenge to progress during 2025.
“So all these positive numbers could be overturned by any change in tariff policies which involve retaliation,” Goss says. “For example, we could have retaliation from China, of course, Canada and again, Mexico, the three that we’re talking mostly about.”
On average, the survey found supply managers expect tariffs, if implemented, to increase input prices by almost ten-percent. Of the supply managers surveyed during February, 26-percent said they feared threatened tariffs, which Goss says was the number-one concern for the year ahead.
“A big issue again, going forward is going to be tariffs — tariffs, tariffs, tariffs,” Goss says, “and depending on how the president and his team negotiate, this is going to be very important, particularly for agriculture and manufacturing.”
Of those supply managers surveyed, 25-percent said the biggest challenge in the year ahead will be finding and hiring qualified workers, though Goss says the hiring numbers for the Midwest saw a very small rise during February.
“This is the first time in a while we’ve had two consecutive months of readings above growth neutral. That’s good,” Goss says. “We’re probably talking about still in terms of the manufacturing sector nationwide, we’re down about 100,000 jobs. For the region, we’re down about 8,000 jobs. So, it’s still not recovered yet from the overall slowdown in manufacturing.”
Looking ahead six months, economic optimism plummeted to 45.7 in February, a big drop from 61.4 in January, which Goss says was due to concerns about global economic tensions and rising tariffs.