Small Gains in Optimism in Iowa Business Council’s Q2 Economic Outlook Survey
June 30, 2020
By Micheal Crumb, Business Record
A survey of chief decision-makers at Iowa’s largest employers shows a slight increase in optimism, with 80% saying they plan to rehire laid-off or furloughed workers in the coming months, according to the Iowa Business Council’s second-quarter Economic Outlook Survey for 2020, released today.
The survey, conducted in mid-June, measures members’ expectations for sales, capital spending and employment over the next six months. The survey’s overall economic index rose to 41.25, up 3.75 points from the first-quarter survey, when the index hit its lowest level since the Great Recession of 2009. Measuring below 50 is considered negative sentiment.
Joe Murphy, top photo, the Iowa Business Council’s executive director, said although the index continues to measure in that negative range, there is optimism among the organization’s members that the economy is beginning to turn around after being shut down by the coronavirus pandemic.
“This brings some credence to the argument that it’s OK to be cautiously optimistic,” Murphy said in comments made before the release of the survey results.
He said that unlike what happened with the Great Recession, when the economic outlook survey fell for two consecutive quarters, the recent survey showed a small uptick after just one quarter of decline.
Murphy described the outlook as a holistic view of what’s been happening over the past 12 weeks and what decision-makers feel may happen in the next six months.
According to the report, most members cite the unfavorable business climate due to COVID-19 and other regulatory challenges coupled with an unfavorable domestic economy as their primary challenges to business. Sixty percent of members expect sales to be lower in the next six months, 45% expect employment to be down, and just 35% expect capital spending to be higher.
Half of the business leaders surveyed said their company laid off or furloughed employees as a result of the pandemic.
“Unfortunately, some of our employers had to make some difficult decisions to lay workers off or furlough those employees, but the good news is 80% plan to rehire some or all that workforce,” Murphy said.
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