Iowa’s economy climbed back into growth territory in July, although concerns remain as job losses continue to mount with expectations that high unemployment will persist for several more months, according to the Mid America Business Conditions Index released by Creighton University this week.

Iowa’s index climbed to 50.9, up from 47.1 in June. The index ranges from zero to 100, with a reading of 50 or higher representing growth conditions, and it looks at indices for new orders, production or sales, employment, inventories and delivery lead time.

The index, a leading economic indicator for a nine-state region, from Minnesota to Arkansas, rose to above growth neutral to its best level since before the coronavirus pandemic hit in March. The index increased to 57.4 in July, up from 50.3 in June.

While the Iowa index crossed above neutral growth in July, job losses were continuing to weaken the overall economy of the state, 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.  

“According to BLS data since the onset of COVID-19, Iowa has lost 108,000 jobs, or approximately 6.8% of its total employment, and 5,400, or approximately 2.4% of its manufacturing employment," Goss said in the report. “Our surveys point to continued job losses in the months ahead.”

Goss said that while improvement was seen in both the Iowa and region’s indices, “they provide no grounds for celebration.

“It will take many more months of above 50.0 readings before the regional economy returns to pre-covid-19 levels,” Goss said.

Highlights from the July survey include:
  • Driven by higher new orders, the Business Conditions Index expanded to its peak reading since March 2019.
  • Manufacturing job losses continue for the region. According to the latest jobs data, the region has lost almost 90,000 manufacturing jobs (5.8%) since COVID-19 pandemic began.
  • Eight of 10 supply managers detailed negative overall effects.
  • Approximately 55% reported job reductions compared to April’s 49%.
  • Worker absences have declined 13% since April.
  • Seven of 10 supply managers reported shipping problems.
  • Business confidence rose to its best reading since April 2018.