To say that the current economy is unpredictable is an understatement.
One of the most frequent questions we get from businesses in Iowa is whether we are going to have a recession. There are countless approaches to analyzing the economy and whether there will be a recession. Even highly technical approaches have a lot of uncertainty. More importantly, each recession impacts each business differently.
At CIRAS we cannot predict the economy, but we can help you interpret what is going on and be ready for whatever happens.
Starting this month, we are publishing a brief review of key indicators impacting Iowa’s economy. Over the coming months, we will be launching additional resources to help leaders be better prepared for changes in the economy – whether or not there is a recession.
Purchasing Manager Indices
Published by the Institute for Supply Management and Creighton University, these survey-based tools ask a set of questions of purchasing managers in manufacturing each month. A value greater than 50 indicates that the current month was better than the previous, and a value over 48.7 has traditionally signaled that the overall economy is growing.
Current results for Mid-America and Iowa indicate continued expansion of the economy. Nearly all the detailed indicators in this index signal strong performance, with the exception of the confidence index, which has registered below 50 since September of 2021.
While you may see reports that these indices have fallen, it is important to remember that they are falling from unprecedented levels and continuing to indicate growth over the previous month.
New Unemployment Claims
While the monthly unemployment rate gives an easy-to-understand snapshot of the economy, weekly initial unemployment claims are a more detailed look at what is happening right now and whether more people are losing their jobs. Full data, including geographic and industry details are available from Iowa Workforce Development.
The current indicators show very low initial unemployment claims. Given the demand for workforce across Iowa and the backlog of work, we expect this to remain low even if the economy slows down.
Our Assessment
Growth has slowed but remains positive. The complex interplay of supply chain constraints, long backlogs, increasing interest rates, and the conflict in Ukraine mean that significant shifts in the economy in either direction are possible. As a leader, continuing your focus on resiliency means:
- Execute on your current backlog of work, paying attention to cash flow.
- Begin the sales process for customers in the government and other counter-cyclical industries.
- Consider long-term workforce availability and needs when making decisions on changes to your business.
If you would like a brief monthly digest with updated indicators, click here to subscribe.
For more information, contact your local account manager or government contracting specialist.