Iowa bankers upbeat about economy

Iowa bankers generally are optimistic about the state economy over the next six months, according to a new economic forecast put out by the Iowa Bankers Association.

The majority of bankers surveyed - 52 percent - anticipated the state's economy will grow in the next six months, while 57 percent were optimistic that their local economies would grow.

Survey respondents also expected businesses in their communities to maintain staffing levels (57 percent) or add employees (38 percent).

But bankers predicted that businesses will have trouble finding and retaining a skilled workforce. A lack of necessary skills was anticipated to be the primary barrier to hiring in the next six months.

Other highlights from the survey:

Marketplace predictions - Most anticipate expansion in the housing sector (43 percent) and service business sector (43 percent), but contraction in the ag sector (57 percent).

Loan demand outlook - Most respondents anticipate loan demand will be strongest for agricultural operating loans (48 percent) and weakest for agriculture real estate loans (52 percent).

Interest rate forecast - A strong majority (76 percent) expect long-term and short-term interest rates to remain unchanged.

The survey, taken in January, includes answers from 21 top executives from banks that are geographically diverse and represent small, mid-sized and large markets.