Iowa struggling to emerge from recession

Iowa's economy appears to be bouncing along the bottom of the current recession, according to the latest index of leading indicators issued Monday.

For the 18th straight month, the Iowa leading indicators index reported a decline, but the 0.2 percent was the lowest since May 2008. The state's non-farm employment index posted its 11th consecutive monthly decline, said Ann Harris of the state Department of Revenue.

“Overall, the weakness remains when you look at the big picture,” Harris said.

“There are some positive signs. But we still can't get past the overall picture remaining negative,” she added. “It's kind of a mixed bag. We're seeing some positive things but overall we're still in negative territory.”

September saw positive movement in new orders, new residential building permits and in the average weekly manufacturing hours -- three indicators that were key in overcoming Iowa's 2000 recession, she said.

The share of purchasing managers in Iowa reporting increases in orders received for manufacturing output pushed up but was slowed by those linked to agriculture, according to the monthly report. Meanwhile, September building permits were up 22.6 percent from the previous year.

“There's still positive signs of recovery building, it's just that they're not strong enough to turn the whole index back into positive territory,” Harris said.

Negative contributors to the overall index include agricultural futures prices, diesel fuel consumption, unemployment insurance claims, the Iowa stock market index, and the yield spread.

September's 94.5 index was down from 94.7 in August and compared to 108.4 in March 2008.