A monthly survey of supply managers in Iowa and eight other Midwest states found improving business conditions in August despite the effects of the Aug. 10 derecho on the region.
The August Creighton University Mid-America Business Conditions Index, which ranges between zero and 100, increased to 60 last month from 57.4 in July, its highest level in two years.
“While the August reading was certainly encouraging, manufacturing activity in the region remains below pre-COVID-19 levels,” said Ernie Goss, director of Creighton’s Economic Forecasting Group in the Heider College of Business
Looking ahead six months, economic optimism, as captured by the August Business Confidence Index, climbed to a strong 73.3, its highest level since February 2018, and up from 68.3 in July.
“Since our survey was conducted after August’s derecho, I expected to record weaker business confidence. However, our survey indicates that the region’s manufacturing sector was spared much of the negative impacts,” Goss said.
The regional employment index moved up to 54.8 in August, its highest level since July 2019, and up from last month’s July 48.5.
Even though the unemployment rate for the region is approximately 4.5 percent higher than immediately before COVID-19, four of five supply managers reported that their companies were experiencing difficulty finding and hiring qualified workers.
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According to U.S. Bureau Labor Statistics data, the region has lost approximately 1 million jobs since the onset of COVID-19, for a 7.3 percent decline of its non-farm jobs.
The regional trade numbers were mixed with new export orders rising to 58.3 from July’s 47.9. An expanding manufacturing sector pushed the import index to 56.8 from July’s 53.9.
“Our August readings point to improvements in the regional trade picture in the months ahead,” Goss said.
Iowa’s Business Conditions Index climbed to 56.4 in August, from 50.9 in July.
“According to U.S. Bureau of Labor Statistics, since the onset of COVID-19, the state’s manufacturing sector has lost approximately 6,000 jobs, a decline of 2.7 percent with transportation equipment manufacturing accounting for a large share of the losses,” Goss said.