The state of Iowa is facing economic challenges as fears of a recession loom large, according to the latest survey conducted by Creighton University.
Economic Struggles in Iowa
The final monthly survey of supply managers for December 2024 in Iowa and eight other Midwestern states paints a bleak picture of the state and regional economies. Iowa’s score on the zero-to-100 scale fell below 41, indicating a slump in the state’s economy.
Creighton economist Ernie Goss reveals that 45% of supply managers believe a recession is either imminent or already underway in the first half of 2025. Another 46.3% predict slow growth without a recession, while only 8.7% anticipate strong growth with no recession in sight. This data highlights the prevailing concerns and uncertainties surrounding the economic landscape.
Impact on Manufacturing Sector
The Midwest’s Business Conditions Index dipped below growth neutral for the seventh time in 2024, signaling ongoing challenges. Additionally, wholesale price inflation has risen for the third consecutive month, impacting the competitiveness of American manufactured goods due to the strength of the U.S. dollar.
Ernie Goss emphasizes the negative implications of a strong dollar on exports and the manufacturing sector. He warns that imposing tariffs on top of a robust dollar could further exacerbate the situation, limiting President Trump’s options in addressing economic issues effectively.
Job Losses and Trade Concerns
The year concluded with significant manufacturing job losses both at a national and regional level. The region’s employment index has remained below growth neutral for 12 consecutive months, underscoring the persistent challenges faced by the manufacturing sector.
Moreover, concerns are mounting over a potential longshoremen port strike on January 15th and its impact on the Midwest. The U.S. International Trade Administration reports a $1.4 billion decrease in Iowa’s manufacturing exports in 2024 compared to the previous year, reflecting a 9.9% decline and further highlighting the economic strain faced by the state.
In conclusion, the economic downturn in Iowa and the Midwest underscores the urgent need for strategic interventions to address the impending recession and support the manufacturing sector’s recovery.
