Iowa’s economy continued to slump in June but showed slight improvement, creeping closer to a neutral growth index, according to the Creighton University Mid-America Business Conditions Index, released Wednesday.
The index ranges between zero and 100, with 50 being neutral growth, and an index ranking of greater than 50 indicating an expanding economy over the next three to six months. It measures the average of indexes for new orders, production or sales, employment, inventories and delivery lead time.
In Iowa, the index continued to slump below neutral growth in June, but climbed to 47.1, up from 41.9 in June.
“Since the onset of COVID-19, Iowa has lost 161,000 jobs, or approximately 10% of its employment,” said Ernie Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business. “Our surveys point to a flattening of employment with only slight job gains in the months ahead.”
In Iowa, the index for new orders was 50.2, production or sales was at 56.1, delivery lead time lagged at 43.2, inventories measured at 50.2, with the employment index at 35.7.
The overall index for the nine-state Midwest region included in the monthly analysis rose into positive territory last month, after three straight months of falling below neutral growth. The index increased to 50.3, up from 43.5 in May, according to Wednesday’s report.
“While the June reading was much higher than I expected, it provides no grounds for celebration,” Goss said in the report. “June’s above growth neutral reading indicates that between May and June, business conditions improved. It will take many months of above 50.0 before the regional economy returns to pre-Covid-19 levels.”
Highlights from the June report include:
- The Business Conditions Index expanded to a reading slightly above growth-neutral.
- Job losses continued for June with an employment index well below growth-neutral.
- In terms of hiring for the rest of 2020, 51% expect no changes, 17% anticipate bringing back furloughed workers, 26% expect to bring back furloughed workers and add new workers, and 6% predicted a continuation of layoffs.
- Regional trade numbers remain near record lows.