IBC survey shows drop in business confidence


September 2nd, 2011 by Ric Hanson

The latest survey from the Iowa Business Council shows a drop in optimism for the next six months among the states 20 largest businesses. The projections are measured on a 100-point scale, with sales dropping four points and capital spending and hiring expectations both falling ten points. I-B-C executive director, Elliott Smith says that dropped the overall index eight points over the last survey three months ago.

Smith says the survey has been have a good year up until this quarter, with steady growth in the indicators since the middle of 2009 when the recession hit bottom. “Definitely a pullback in this quarter,” Smith says. Smith says even with the drop, they still are on the positive outlook side for each of the indicators.

He says he hopes this is an aberration for one quarter after coming out of “fairly complicated and frustrating budget talks in Washington,” along with the uncertainty in Europe and some natural disasters that have lent some uncertainty to the business market. Smith doesn’t know if this indicates a possible second recession.

“You know it’s really hard to tell exactly if we’re looking at anything that’s significant and long-term in nature, or if it’s more just a pull back and reboot for the next six months,” Smith says. He says the I-B-C still remains confident with all the numbers still in the positive outlook area, and sales remain strong. Smith says this is hopefully businesses just “checking signals” before they step ahead with any big plans. He says they are hopeful the economic turnaround will continue forward and not falter.

Smith says the president has a major speech next week and if the reaction is good, things may bode well for the rest of the year. Seventy-nine-percent of the businesses in the survey still say they expect hiring levels to remain steady or increase in the next six months. Only 16-percent says they expect sales to decrease in the next six months. See the complete survey at the Iowa Business Council’s website at:www.iowabusinescouncil.com.

(Radio Iowa)