The Elbert Files: Iowa’s election year economy
Politicians take credit when the economy does well and blame others when it doesn’t, although the truth is that government can do little beyond imposing embargoes and trade tariffs that has much direct impact.
That doesn’t stop candidates from making the economy a point of contention in election years. Nor should it discourage us from asking questions.
With that in mind, I thought it might help to take a look at how the Iowa economy is doing as we head into the general election.
So here’s Dave’s short course on the Iowa economy in 2016.
With the notable exception of agriculture, which I’ll come back to, Iowa’s economy is about as good as it’s been in an election year going back nearly a decade.
In fact, a case can be made that Iowa is well on its way to becoming a 21st-century global economy. Recent data show the state’s insurance, health care and transportation sectors are doing quite well. In fact, all are doing much better than the same industries in other parts of the country.
Our unemployment rate for May was 3.9 percent, the 15th-lowest in the nation and well below the national rate of 4.7 percent.
Iowa passed its pre-recession employment peak two years ago and now has roughly 50,000 more workers than it did then and about 100,000 more jobs than when employment hit bottom in 2010.
The data also show that Iowa’s manufacturing employment hit its post-recession peak a couple of years ago and has been trending downward since then. Much of the decline is the result of slackened demand for farm equipment because of lower farm prices and income.
Construction was slow to recover from the 2008 recession but is now the state’s fastest-growing industry, adding more than 10,000 new jobs in the past year.
Statewide building permits are up 70 percent from their post-recession lows in 2009. They’re not quite back to pre-recession levels. But given what we now know about the overheated months leading into the 2008 recession, that’s probably a good thing.
That’s especially true with housing, where the 125,333 housing starts for the 12 months ending April 30 were up 50 percent from the recession low but are still 30 percent below the pre-recession peak.
In Des Moines you can’t go more than a few blocks in the downtown area without running into a construction crane or a partially blocked street, whether it’s Kyle Krause’s new Kum & Go headquarters across from the Pappajohn Sculpture Park, Hubbell Realty’s new Bridge District south of the Botanical Gardens or any of the many hotel, residential and commercial projects in between.
In fact, downtown hasn’t seen this much variety in construction activity since the mid- to late 1980s when 801 Grand, the Hub Tower, the State Historical Building and Embassy Suites were all under contract.
At this time of year, Iowa’s rural landscape has a lush feel to it, but the truth is you don’t have to travel far to feel the pinch of low farm prices.
Corn and soybean prices are the lowest they’ve been since 2007, which was right before rising ethanol and export demand combined to create several golden years for Iowa farmers.
But world and domestic demands for Iowa’s two major crops slackened two years ago, and they have not rebounded.
Low corn and soybean prices are often good for livestock producers, but this year it’s not enough to offset low cattle prices that have pushed Iowa’s cattle profit index into negative numbers since November.
The bottom line is a lot rides on Iowa’s farm economy.
So if you have the chance in coming months, ask a politician what he or she is going to do to increase demand for Iowa farm products.