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Cedar Rapids, Iowa 52401
Things are good for business in Iowa, Iowa Business Council Executive Director Joe Murphy said. But we better be prepared for some potential hurdles on the horizon.
“We need to be clear-eyed about the situation,” Murphy told The Gazette on Thursday.
Pointing to the IBC’s second-quarter economic survey, released this past Tuesday, he noted members’ top three concerns for the next six months were:
- Continuing workforce shortage challenges — by 88 percent
- An unfavorable business climate fueled by supply-chain and infrastructure tangles — at 72 percent
- The increasing costs of buying materials — 66 percent.
Overall numbers dropped in most of the survey’s categories due to those worries. Sales expectations, in particular, declined 4.46 points, to 65.27.
Murphy was quick to note the business sentiment index still was in positive territory, at 63.88. Above 50 is considered good.
“We’re becoming more comfortable with being uncomfortable,” Murphy said. Over the past 26 to 28 months, Iowa’s businesses have become “exceptionally resilient in the face adversity.”
But “unpredictable things happen,” said Murphy, who has been IBC executive director since September 2019.
Among the “potential uncertainties” he noted worries not limited solely to Iowa — possible greater inflation, another widespread virus outbreak and an expanded ground war in Europe and the resultant impacts on the global supply chain.
On the employee recruiting and retention front, members said they had a total of more than 11,000 open positions across Iowa. Seventy-two percent said hiring had become “difficult” or “very difficult.”
Murphy’s advice, for for-profits and not-for-profits: Take advantage of right now, “while we’re relatively stable.”
That’s why the IBC index showed capital spending expectations increasing by 2.19 points, to 66.66.
Capital spending is defined as spending to acquire, upgrade and maintain physical assets such as buildings, technology or equipment, the IBC said.
Meanwhile, sales expectations for the next six months decreased 4.46 points, from the first quarter’s 65.27.
Respondents added that supply chain conditions are not expected to change a good deal — for better or worse — in the next six months. Eighty-three percent anticipate no change, but 11 percent anticipate some improvement.
The not-for-profit IBC members are the chief decision makers for 20 Iowa employers. They include Cedar Rapids’ largest employer, Collins Aerospace, as well as Alliant Energy and MidAmerican Energy, Casey’s General Stores, Hy-Vee, UnityPoint Health, HNI Corp., Vermeer Corp., Wellmark Blue Cross and Blue Shield of Iowa, Iowa Bankers Association and Deere and Co.
The IBC economic outlook survey has been conducted quarterly since 2004.
On a national basis, business research company IBISWorld noted in a report on its website Wednesday that COVID-19 vaccines and pent-up consumer demand helped bump up U.S. business confidence in 2021.
But that sentiment, the Los Angeles-based company said, is likely to drop, to 58.8, this year with concerns over Russia’s invasion of Ukraine, more Federal Reserve Bank rate hikes and fears over a possible recession.
In addition, it anticipated that sentiment index would remain volatile over the next five years.
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