Iowa City area businesses expanding, survey says

Amid a weak U.S. economy that has forced businesses to downsize and put thousands out of work, companies in the Iowa City metropolitan area are continuing to grow and remain valuable, a recent survey shows.

Most of the 65 interstate commerce companies polled for the Iowa City Area Development Group's “existing industry report” also gave an optimistic employment outlook.

“Local companies are considerably more optimistic about their ability to grow and create employment through their ability to continue offering new products and services to the markets they serve,” according to the survey, which was conducted during the first and second quarters of 2011 and released Thursday.

All of the companies polled operate in Johnson, Washington, Cedar, Iowa or Muscatine counties and had a combined number of employees of 13,709, which is 2.1 percent higher than in 2010. About 75 percent of the businesses said they have plans to expand, and 89 percent reported having introduced a new product or service in the last five years - far surpassing the national average in 2010 of 69 percent, according to the survey.

None of the companies included in the survey were at significant risk of closing, according to the report, and the local firms earned a growth score that was 20 percent higher than other Iowa communities.

The opinion that local company heads have about the productivity of their workers, however, was lower than it has been since the group began conducting the analysis in 2001. On a scale of 1 to 7, employee productivity dropped to a rating of 5.6 this year from its peak of 6.1 in 2001 and below the national average of 5.7.

But a majority of local companies indicated they're struggling to find qualified hires for some positions. Local businesses had a combined 388 job openings at the time of the survey, and they projected more than 1,100 new jobs within the next three years, the survey reported.

“Some companies attribute recruitment challenges directly to their industry and type of work, but many say the misperception of our region, especially by out-of-state candidates, creates barriers to recruiting needed workers,” according to the report.

Andy Ockenfels, president of City Carton Recycling, said his business lines up with the survey's finding in its plans to expand at both its Iowa City and Cedar Rapids branches and hire eight to 10 new employees.

“The positions we are adding are new positions, so we are expanding our overall footprint of employees,” he said. “And we are investing back into our company, which makes us that much more solid for the future.”

Ockenfels said the hiring is going well, although “you definitely have to search.”

“There is not an excess amount of qualified people in the area for the jobs we are hiring for,” he said.

But his outlook for Iowa City's business corridor is positive.

“I see that there is a strong push to get more business into Iowa,” he said. “So we are optimistic, especially with work that ICAD is doing.”

Joe Raso, president of the Iowa City Area Development Group, said his organization uses the results of the survey to help guide programming for workforce and economic development.

“The success and growth of these companies directly impacts job creation, capital investment and tax revenues in this region,” Raso said.