IBC's 2022 Q2 Economic Outlook Survey Released
IBC Projects Positive Six-Month Economic Outlook
Sales and Employment Expectations Decrease, While Capital Spending Rises
DES MOINES, IA – The Iowa Business Council (IBC) has released its second-quarter Economic Outlook Survey for 2022. The report measures member expectations for sales, capital spending and employment for the next six months. If the index measures above 50, sentiment is positive. The second-quarter survey's overall economic outlook index is 63.88. The results project confidence for the eighth quarter in a row. However, index numbers dropped in most categories amidst ongoing concerns pertaining to labor shortages, supply chain issues and inflation.
Sales expectations decreased 4.46 points from the first quarter’s findings to an index value of 65.27. Conversely, capital spending expectations increased by 2.19 points to 66.66. While each of these index scores remains positive, it reflects ongoing economic factors such as inflation, supply chain issues and global unrest.
The employment index dropped 3.43 points to 59.72. Most respondents indicate that hiring remains a top concern, with 72% declaring the process is difficult or very difficult. Members report more than 11,000 current job openings across the state.
When asked about primary business challenges, leaders ranked attracting/developing/retaining a quality workforce first amongst their concerns (88%). Unfavorable business climate (supply chain issues, infrastructure, regulations, taxes) ranked second (72%). Cost of product/service inputs ranked third (66%).
Supply chain conditions are not expected to change much in the next six months. A majority (83%) of respondents expect no change, while 11% anticipate improvements.
“Iowa companies remain optimistic but are clear about the challenges that lie ahead in the coming months,” says Tim Yaggi, President & CEO of Pella Corporation and Chair of the Iowa Business Council. “Over the last two years, our member companies have proven they are resilient to national and international pressures. Business leaders are managing through inflation, supply chain issues and workforce challenges, but expect stable demand.”
“As sales expectations decline and capital spending projections increase, it is no surprise that the overall index score has dropped. However, our members continue to believe in Iowa’s economic fortitude,” explains Iowa Business Council Executive Director Joe Murphy. “Over the next six months, company leaders will be taking all the necessary steps to prepare for potential uncertainties that may lie ahead.”
The Economic Outlook Survey has been completed by IBC members on a quarterly basis since 2004. The report provides insight regarding the projected trends for the state of Iowa, which can be used for business and economic planning. The reported trends have a state-wide impact, especially when considering that IBC companies have a presence in all 99 counties. To review previous Economic Outlook Surveys, please visit www.iowabusinesscouncil.org.
About the Iowa Business Council
The Iowa Business Council (IBC) is a nonpartisan, nonprofit organization whose 20 members are the chief decision makers of major Iowa employers. Employing over 190,000 Iowans, IBC member companies have invested billions of dollars of capital in Iowa's commercial infrastructure; lead the way in technology innovation, R&D, and grants procured; and are often the driving financial and volunteer forces behind philanthropic efforts all over the state.
IBC member companies include: Alliant Energy; Casey’s General Stores, Inc.; Collins Aerospace; Corteva Agriscience; Deere & Company; Fareway; HNI Corporation; Hy-Vee, Inc., Iowa Bankers Association; Kent Corporation; MercyOne; MidAmerican Energy Company; Pella Corporation; Principal; Ruan Transportation Management Systems; The Weitz Company; UnityPoint Health; Vermeer Corporation; Wellmark Blue Cross Blue Shield of Iowa; and Wells Enterprises, Inc.