Business

Survey of Iowa businesses indicates increased optimism for next six months

Overall economic index highest since start of coronavirus

Customers walk into the Johnson Avenue Hy-Vee in Cedar Rapids in August. Hy-Vee is one of the 22 members of the Iowa Bus
Customers walk into the Johnson Avenue Hy-Vee in Cedar Rapids in August. Hy-Vee is one of the 22 members of the Iowa Business Council. (Andy Abeyta/The Gazette)

Leaders at 22 of the largest Iowa companies are showing significantly more optimism about the business climate now than three months ago, according to a survey from the Iowa Business Council.

Iowa Business Council develops an overall economic index based on the quarterly survey asking businesses what they expect in the next six months. The third quarter index is 58.71.

Anything more than 50 is considered positive.

Joe Murphy, Iowa Business Council executive director, said the bipartisan federal stimulus helped “stem the tide” and avoid a “really catastrophic situation.”

“Some of that uncertainty that we’ve talked about before is starting to become a little more clear,” Murphy told The Gazette.

“They’re able to spend or at least plan for additional capital expenditures over the next six months.”

Gov. Kim Reynolds was optimistic about the results of the IBC survey at her weekly news conference Wednesday.

“That’s good news that hopefully the economy is recovering, we’re moving in the right direction and we can start to see some positive things continue to happen in our state,” Reynolds said.

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That optimism is a stark contrast to the previous two quarters. In April, the index was at 37.5. It increased to 41.25 at the end of the second quarter.

In comparison, the index was at 60.09 at the end of 2019. Before the pandemic, the last time the index dropped below 55 was in 2009.

The survey also showed more than 80 percent either expect employment to increase or stay the same in the next six months. About half expect sales to be higher.

Murphy said businesses are “not out of the woods yet” as the coronavirus continues to take its toll.

“I don’t want to minimize the strain on the economy,” Murphy said. “I’m very excited about the optimism, but I do think we need to be grounded by the realities that we face.”

Gazette reporter Rod Boshart contributed to this article.

Comments: (319) 398-8394; john.steppe@thegazette.com

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