A- A+

Employment Trend Rises

June 2, 2014

A majority of Iowa Business Council (IBC) members expect to sustain or increase hiring needs over the coming six months, while sales and capital spending levels moderate for the state’s largest employers. The 2014Q2 IBC Overall Economic Outlook Survey Index (OSI) is 64 — two points higher than last quarter (62) and the same as this time last year (64). The 2014Q2 survey was completed by the corporate members of the Council during the second half of May, the results of which were released today.

The 2014Q2 Sales OSI is 68, which is no change from last quarter (68) but two points behind a year ago (70). Ninety percent of the CEOs expect steady or increased sales over the next six months — substantially higher (10%), higher (57%), or no change (24%). Ten percent of the survey respondents expect sales levels to decrease — lower (10%) or substantially lower (0%).

The 2014Q2 Capital Spending OSI is 60, which is one point lower than last quarter (61) and four points behind the 2013Q2 survey (64). Ninety percent of IBC corporate members expect steady or increased capital spending levels through November 2014 — substantially higher (10%), higher (24%), or no change (57%). Ten percent of survey respondents expect capital spending, i.e., investments in facilities and equipment, to decrease — lower (10%) or substantially lower (0%).

The 2014Q2 Employment OSI is 63, six points higher than three months ago (57) and five points ahead this time last year (58). This outcome matches the historical high for the Employment OSI of 63, reached twice before — in 2012Q2 and 2008Q1. Eighty-six percent expect hiring levels for the next six months to remain steady or grow — substantially higher (5%), higher (52%), or no change (29%). Fourteen percent expect employment needs to decrease — lower (14%) or substantially lower (0%).

“After a few quarters of steady sales and capital spending numbers, employers appear to be gaining confidence in terms of hiring. The challenge will be to sustain this trend for the long-term,” said Larry Zimpleman, the Chairman, President, and CEO of Principal Financial Group in Des Moines and 2014 Chair of the Iowa Business Council.

NOTE: Rounding may cause the addition of percentages in a measure to equal more or less than 100%.

The quarterly Iowa Business Council Economic Outlook Survey incorporates a diffusion index, wherein each survey response falls on a 100-point scale. Using weighted averages, an index number is then calculated that measures the sentiment of IBC executives projecting business activity six months into the future. An Outlook Survey Index (OSI) of 50 indicates that the business sentiment of all survey participants is average; an OSI above 50, the sentiment is positive; below 50, the sentiment is negative. This index generates a numeric measure going forward that attempts to more precisely estimate the economic condition of business activity in Iowa.

The Economic Outlook Survey is conducted quarterly by the Iowa Business Council to inform Iowa businesses and Iowans about projected trends in the state’s economy, which may prove useful for business and economic planning purposes.

About Iowa Business Council (IBC)

The Iowa Business Council (IBC) is a nonpartisan, nonprofit organization whose members are the top executives of the largest businesses in the state, the three Regent university presidents, and the Iowa Banking Association. Founded in 1985, the Council's purpose is to focus the personal commitment of its members in active leadership roles on major initiatives that offer opportunity to enhance Iowa's economic vitality and improve the lives of Iowans. Council members identify economic issues, evaluate options, and assist in implementing solutions through collaborative public/private partnerships. Collectively, IBC companies and institutions impact the livelihoods of one in six Iowans, directly employing a quarter million citizens. The combined payroll of these entities is in excess of $11 billion, and they have committed billions of dollars in capital investment to the state. On an annual basis, several hundred million dollars in financial contributions and thousands of volunteer hours are directed to numerous charitable causes around Iowa. IBC members also lead in technology innovation with billions of dollars spent and grants procured for research and development. The Business Council focuses its efforts primarily in areas related to advanced technology, continuous process improvement, economic and workforce development, education excellence, health care and wellness, and operations continuity and security. Its representation reaches across the state — from borders north and south to rivers east and west. For more information, please visit the IBC website at www.iowabusinesscouncil.org