Iowa's business leaders' outlook is slightly less confident than it was a year ago, but a sales indicator shows things are still heading in the right direction, according to a quarterly index released today.
The Iowa Business Council's first-quarter Overall Economic Outlook Survey Index is 62. That's two points lower than it was this time last year and the same as it was last quarter. The survey was completed by the corporate members of the council during the second half of February, and is a gauge on how leaders of Iowa's largest companies feel about the coming six months. The index is weighted on a 100-point scale, and a reading above 50 indicates positive sentiment.
The slight decline in the outlook from last year isn't a cause for concern, said Elliott Smith, executive director of the Iowa Business Council, as the numbers show a "stable" outlook.
"A year ago, coming out of a very slow economic period for the country, the momentum was still pretty solid, and I think we saw a little more robust optimism," Smith said. "Now that we've sort of settled into this, I think it's just something of a leveling out right now."
The overall index is made up of indices on sales, capital spending, and employment. The sales outlook index was 68, three points behind a year ago but five points higher than last quarter. The five-point change from last quarter is a good sign, Smith said, because typically the sales index proves to be a leading indicator for what will happen with capital spending and employment in the future.
The capital spending outlook index was 61, the same as last quarter and a year ago. The employment outlook index was 57, three points lower than a year ago and four points lower than last quarter.
The Iowa Business Council is made up of top executives of the largest businesses in the state, as well as the three state university presidents and a representative of the Iowa Banking Association.