Business leaders' economic optimism softens

Attracting, keeping workers seen as biggest challenge

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Top executives of Iowa’s largest businesses are not as optimistic about economic activity in the state as they were in the second quarter of 2016.

The Iowa Business Council’s third-quarter overall economic outlook survey index slipped to 57, five points below the reading of 62 in the second quarter of this year and two points lower than the third quarter of 2015.

The survey’s sales index dipped to 59 in the third quarter from 64 in the previous quarter. Ninety-one percent of the CEOs expect steady or increased sales over the next six months and the remainder expect sales levels to decline.

The IBC’s overall capital spending index dropped to 56 in the third quarter from 62 in the previous quarter. Eighty-two percent of IBC corporate members expect steady or increased capital spending levels through February 2017 and the remaining 18 percent expect investments in facilities and equipment to decrease.

The IBC survey’s overall employment index slipped to 56, four points lower than three months ago (60) and five points behind this time last year (61). Eighty-one percent expect hiring levels for the next six months to remain steady or grow and the remainder believe employment needs will decline.

Each survey respondent also was asked to choose up to three primary business challenges from a list of five that their company is facing.

Attracting and retaining a quality work force was selected as the largest challenge by 63 percent of the respondents, followed by an unfavorable business climate (53 percent) and weak domestic economy (47 percent).

Mike Wells, IBC chairman and president of Wells Enterprises in Le Mars, said in a news release that companies rely on certainty when charting business plans and strategic activity.

“The current economic environment, both domestically and overseas, does not present itself well in that regard, which is producing tempered enthusiasm for outcomes the rest of the year,” Wells said.

IBC’s members are the top executives of Iowa’s largest businesses, the three Regent university presidents and the Iowa Bankers Association.

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