DES MOINES, IOWA – June 3, 2013. Expectations in sales, capital spending, and employment for Iowa’s largest employers over the coming six months moved very little as business leaders continue to express a positive, though cautious, economic outlook. The 2013Q2 Iowa Business Council (IBC) Overall Economic Outlook Survey Index (OSI) remained at 64 – the same as three months ago (64) but four points lower than this time last year (68). The 2013Q2 survey was completed by the corporate members of the Iowa Business Council during the second half of May, the results of which were released today.
The 2013Q2 Sales OSI is 70, one point lower than last quarter (71) and three points behind one year ago (73). All of the CEOs expect steady or increased sales over the next six months – substantially higher (5%), higher (67%), or no change (29%). None of the survey respondents expect sales levels to decrease – lower (0%) or substantially lower (0%).
The 2013Q2 Capital Spending OSI is 64, which is three points ahead of last quarter (61) but five points below the 2012Q2 survey (69). Ninety-five percent of IBC corporate members expect steady or increased capital spending levels through November 2013 – substantially higher (14%), higher (33%), or no change (48%). Five percent of survey respondents expect capital spending, i.e., investments in facilities and equipment, to decrease – lower (5%) or substantially lower (0%).
The 2013Q2 Employment OSI is 58, two points lower than three months ago (60) and five points behind this time last year (63). Eighty-six percent expect hiring levels for the next six months to remain steady or grow – substantially higher (0%), higher (43%), or no change (43%). Fourteen percent expect employment needs to decrease – lower (14%) or substantially lower (0%).
“Business leaders remain optimistic but guarded in their assessment of the economy,” said Stan Askren, the Chairman, President, and CEO of HNI Corporation in Muscatine and 2013 Chair of the Iowa Business Council.
NOTE: Rounding may cause the addition of percentages in a measure to equal more or less than 100%.
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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.