The Iowa Business Council today released its first-quarter Economic Outlook Survey for 2020, which saw the overall economic outlook index fall to a negative outlook of 37.5, one of its lowest points since 2009. With most survey respondents noting the ill effects of the coronavirus, the figure demonstrates a significant drop from the fourth-quarter 2019 projection of 60.09. 

IBC’s 22 members have employees across the state and all industries, showing the wide effect of COVID-19. “The thing about this equation is that it does not attack one sector of the economy, one sector of the business ecosystem,” IBC Executive Director Joe Murphy said. “Manufacturers are being hit, financial services are being hit and health systems are being hit. So no one is spared from this.”

The survey measures members’ expectations for sales, capital spending and employment for the next six months. If the index measures below 50, sentiment is negative. The economic and global uncertainty serves as businesses’ most substantial challenge. The ability to develop full-fledged response plans to the COVID-19 global pandemic is hindered by the fluidity of daily domestic and global affairs. 

“Iowa Business Council members’ sentiment reflects the broader economic uncertainty the country is currently facing,” IBC Board Chair Mary Andringa said in a statement. “Our members remained focused on the health of our employees and maintaining our operations as best as possible given the global pandemic. We know Iowans will pull through this together.” 

While some IBC members have already seen a drop in revenue due to COVID-19, there is anticipation for further decline. COVID-19 has substantially affected supply chains for Iowa businesses, and members project further negative effects in the near term. 

“We’re just dealing with a lot of uncertainty with respect to our current and future workforce needs,” Murphy said. “And then if other developments occur that would further inhibit a person’s ability to either manufacture goods or to do the services that they currently are doing, that will just lead to more.”

The workforce challenges facing businesses are almost the exact opposite of challenges faced just a couple of months ago when low unemployment was recognized as one of the largest concerns. More than 58,000 Iowans last week filed for initial unemployment benefits, pushing the number of first-time applicants in March to more than 100,000, according to newly released data from the U.S. Department of Labor.

“Keeping employees healthy and able to work is a major priority for Iowa business. We will continue to work with our partners at the state and federal level to advocate for health and business needs during this volatile time,” Murphy said.

The economic outlook indexes for sales, capital spending and employment are each under 50, dropping several points from the previous quarter in each category. With an inability to look much past the implications of COVID-19, members cited the unfavorable domestic and global economic outlook as their primary business challenge. 

“Iowa is a resilient state. Its people are resilient and certainly businesses are resilient as well,” Murphy said. “We’ve come back from situations that are catastrophic before — whether it was it was a financial crisis in 2008-2009, whether it was the farm crisis of the 1980s, or whether it was weathering two 500-year floods within a 12-year time span.

“We come back every single time. And this time will be no different. We don’t know when that will be, but we will be ready to lead to more economic prosperity as quickly as we can.”

The Economic Outlook Survey has been completed by the IBC members on a quarterly basis since 2004. For more information, visit www.iowabusinesscouncil.org.