Iowa’s top executives have a cautious outlook when it comes to the next six months, giving the state’s business climate mixed reviews.
While most expect an increase in capital spending over the next six months, they also anticipate sales and employment needs to fall from last quarter, according to the Iowa Business Council (IBC) third-quarter economic outlook survey index, which was released Tuesday.
The index, which projects business activity, including sales, capital spending and employment, for the next six months, fell to 61 – three points lower than last quarter but the same as this time last year. A reading of above 50 indicates that the business sentiment of all survey participants is positive.
The IBC is made up of Iowa’s top executives, including the 21 largest businesses in the state, three public university presidents and the state’s largest banking association.
Most executives, about 89 percent, said they anticipate sales to increase. But third-quarter sales fell to 67, which is three points lower than last quarter’s index of 70.
About 11 percent expect sales to decrease.
Some 90 percent of executives say they will increase capital spending through February 2014. The index sat at 65, which is one point ahead of last quarter and five points higher than 2012.
And while 74 percent of respondents said they expect hiring to grow or remain steady, the index fell to 52, which is six points lower than three months ago and five points behind this time last year.
About 42 percent of executives said they expect no change in hiring, and 26 percent expect employment needs to decrease.
“Though still cautious in its overall outlook, the increased capital spending level conveys an expectation within the survey for positive economic activity in the coming months,” said Stan Askren, chairman, president, and CEO of HNI Corp. in Muscatine and IBC chairman.