Iowa saw an 11% growth in its gross state product in 2022, indicating the state’s continued resilience coming out of the pandemic, according to the Iowa Business Council’s annual Competitive Dashboard report released today.

The report showed that Iowa’s gross state product increased to almost $217 billion in 2022, compared with just over $194 billion the previous year, and Joe Murphy, the Business Council’s executive director, said that level of increase is a good indicator of the state’s continued recovery.

“I think that indicates Iowa’s resiliency from an economic standpoint, which I think is important to point out. And the fact we have such a strong GSP again for a state the size of Iowa is a really good indicator,” Murphy said in comments made ahead of the report’s release.

The Competitive Dashboard compares Iowa with the rest of the country, using the same data that can be measured in every state. It looks at economic growth, education and workforce, governance, health and wellness, and demographics and diversity. It also includes recommended actions in each category.

Under each category is a subset of data measuring Iowa’s performance against other states.

For example, under economic growth is gross state product. Despite the increase in the state’s GSP, Iowa remained No. 30 in state rank, which Murphy said he would expect to see rise as tax reform measures passed during recent legislative sessions continue to be fully implemented, leading to further economic growth.

Iowa was ranked No. 3 in manufacturing value as a percentage of GSP, at 17.8%

“That’s enormously important as we think about how our state economy is diversified,” Murphy said.

He said that manufacturing is the state’s top industry, but that Iowa has a strong presence in financial services, agriculture, biosciences and biotechnology.

“And the confluence of all those things working together leads to that expansion in our gross state product, and again continues to help us be more resilient, particularly in the Midwest,” Murphy said.

He also cited continued growth in high school work-based learning programs, nearly tripling since 2020 with 360 programs in the state’s high schools.

The programs are a critical tool to get people engaged in the workforce at a younger age, Murphy said.

“The sooner a student can identify both what they may want to do, but also what they may not want to do is a good step in the right direction to help them figure out what they want to do with their career,” he said.

Work-based learning is not a category that compares Iowa with other states, but only shows the expansion of the programs in high schools statewide.

Iowa did jump in ranking in both fourth grade reading proficiency, increasing to No. 17, and eighth grade math proficiency, where the state jumped to No. 16, up from No. 24 the prior year, the report showed.

Under governance, Iowa jumped several spots to No. 12 in top states for business, up from No. 20 the previous year. While recent tax reform measures to lower corporate and individual income tax rates may have played a factor in the improved ranking, Murphy said the category considers several things, including cost of living, overall cost of doing business, technology, innovation and the state’s workforce.

“There’s a number of factors that go into it, and I think what it shows is we’re making a lot of good strides in a lot of other areas, whether that be housing, infrastructure, cost of living, we’re doing a lot of different things to make Iowa more competitive, not just for businesses but for individuals as well,” he said.

Murphy continued to express concern about Iowa’s stagnant population growth. The state gained just 3,000 people in 2022 and remained ranked No. 31. Its five-year population change showed 1.6% growth, with the state falling three spots to No. 31 in that category.

He said the state needs to make sure “we’re mindful of our continued population challenges, but also view that as an opportunity to increase our competitiveness.”

“We have a lot of really great things that we can talk about in this state that will go towards increasing our population,” Murphy said. “Safe communities and safe schools. Affordable cost of living. Very short commute times. The ability to advance in your career more quickly in a state like Iowa than other places. The ability to get involved in your community. So … we have a lot of good things going for us, combined with immigration reform at the federal level that can be helpful in increasing and retaining our population.”

Recommendations contained in the report include:

Economic growth: Create a vibrant economic ecosystem to sustain and fuel growth; continue improvement in the state’s tax system and continue investment in affordable and workforce housing.

Education and workforce: Continue to work with secondary and postsecondary schools to engage students and educators to develop career pathways; develop and implement solutions to provide work-based learning opportunities for all students and work with school districts to offer registered apprenticeship and other programs to meet the needs of businesses and provide real-world experience for students; and continue to advance strategies to increase child care availability and address the shortage or workforce because of low wages.

Health and wellness: Continue efforts to attract and retain primary care physicians and other medical professionals and support tort reform efforts; support Iowa’s entry into various national mental health consortiums, increase Medicaid reimbursement in specific areas, support realignment of mental health and disability regions.

Governance: Continue tax reform efforts to make Iowa more competitive.

Demographics and diversity: Continue work with federal officials on immigration reform; support the Afghan Adjustment Act being considered in Congress that would provide a path to permanent status to Afghan refugees; and continued commitment to advance diversity, equity and inclusion as a fundamental element of corporate success and responsibility.