2014 Economic Forecast: What we learned
Reporters share 13 highlights from our annual economic forecast
Friday, February 07, 2014 7:00 AM
Last week, some top economic experts in Iowa shared their insights and opinions about the state’s economy in 2014 at the Business Record’s annual Economic Forecast event. A capacity crowd asked questions of panelists Franklin Codel, executive vice president and head of mortgage production at Wells Fargo & Co.; Debi Durham, director of the Iowa Economic Development Authority; David Miles, chairman and CEO of Miles Capital Inc.; Mary Mosiman, state auditor; and Dave Swenson, an Iowa State University economist.
Since we didn’t have to ask the questions, we got a chance to listen with a more personal focus. Here’s what we were talking about as we drove back to the office.
Business Record managing editor
I was much relieved to hear David Miles say he doesn’t expect interest rates to jump following the Federal Reserve’s decision to cut its bond buying back next month. Why? Because I’ve been procrastinating on getting my home mortgage refinanced at a lower interest rate and was hoping I hadn’t waited too long. Miles said he believes the market is reacting to what’s really going on in the economy rather than to Fed announcements about scaling back quantitative easing.
Helping the most harmed:
The recession may be officially over, but not all Iowans have been made whole, economist Dave Swenson reminded the group. Those just getting ready to retire and those just graduating from college in 2008 were particularly hurt. Swenson, who had two adult children living in his basement at that time, talked about the difficulty many of those graduates continue to have because they didn’t immediately find work in their field. “It’s like they have a scarlet something on their forehead because they haven’t found work in their field,” he said. That resonated with me, as one of my children graduated in 2008 and still isn’t working in a job that uses her education. Franklin Codel followed up with great advice to the group. “All of us can make sure that we’re doing our part,” he told the audience. Make yourselves available to young people. Help and encourage them. Take them to lunch or coffee if they want to know how they can find a job in your field, he urged us.
David Miles, a very smart guy, said he thinks Washington, D.C., is less dysfunctional and that Congress and President Obama are more motivated to work together than they were six months ago. I’m going to have to take his word on that one.
Business Record senior staff writer
$1 billion deal ahead?
Debi Durham said her department had closed on a $1 billion deal that would come before the Iowa Economic Development Authority board later this month. Wow, that’s big. After the luncheon, Durham said she couldn’t talk about the project. When asked which industry the company involved in the deal operated in, Durham again demurred: “That would be interesting to know.” Wouldn’t it, though.
Economic data heads:
You have to wonder whether people who sift through tons of data for a living develop odd personality quirks. Apparently not. The panelists showed flashes of wit, no small measure of compassion, especially for those whose lives were changed in dramatic ways by the recession, and sparks of disagreement. One thing was obvious: They have a true zeal for making sense of the data and using it in ways that will improve the lives of Iowans. And none of them were campaigning for public office.
Business Record senior staff writer
Good news for first-time home buyers:
Franklin Codel said he hears from a surprising number of young professionals who still believe that they need a 20 percent down payment to buy a house, when in fact most people are putting just 3 to 5 percent down. “So you can buy a house as a growing family with a nominal down payment,” he said.
Want to apply for sainthood? Get Mary O’Keefe to write your nomination package and you’re a shoo-in to be canonized, quipped Principal Financial Group Inc. Chief Financial Officer Terry Lillis, who accepted the Deloitte CFO of the Year Award. “After I pass, which hopefully will be many, many fruitful years from now, and the thought of canonization comes up, I want to make sure that Mary O’Keefe and her staff is doing that nomination, because this one certainly made me look like a saint,” he said. Not to be outdone, David Miles later appealed for immediate sainthood – for himself.
Business Record staff writer
I cover economic development for the Business Record, and I heard three themes at the luncheon that I expect to hear a lot this year:
Worker shortage in Iowa:
Our state’s population isn’t growing fast enough, and it’s a struggle for many businesses to find the workers they need. David Swenson mentioned that Iowa educates lots of skilled workers “and other people are very, very good at outbidding us for that talent.”
“Iowa is working:”
This was the theme of Gov. Terry Branstad’s Condition of the State address, and it’s clear that his team is reinforcing the slogan. Debi Durham repeated it in an interview with me a few weeks ago and again at the Economic Forecast. Mary Mosiman used a variation of the phrase at the event too. Branstad’s agenda this year is business-focused, so expect to hear “Iowa is working” over and over.
Federal government uncertainty:
I’ve heard a variation of the following phrase a few times: “This should be a good year for the Iowa economy, but the federal government worries me.” Both Mosiman and Durham brought up that concern. Swenson provided a dissenting voice. He disagreed that the federal government has much direct economic impact on Iowa. But Franklin Codel noted that the uncertainty surrounding the government shutdown, the debt ceiling and Obamacare affects consumer confidence, which does have a negative impact on the economy.
Business Record staff writer
Supporting female businesses:
For the past two months, I -- along with several others at the Business Record -- have been preparing to launch Lift Iowa, a weekly e-newsletter that will focus on connecting and empowering Iowa women who aspire to lead. When Business Record Chairman Connie Wimer asked the panelists whether increasing female business leadership in Iowa would have any impact on the economy, Debi Durham had some good news. She said her department is planning a seminar this summer to put together women investor groups to invest in female-owned businesses. Lack of capital still is a key roadblock for women business owners, she said.
Hops and fish on the farm:
Last year, Jessica Dunker, president of the Iowa Restaurant Association, told me that aquaculture is on the rise in Iowa. The term came up again when Debi Durham mentioned diversification of Iowa’s agriculture. More of the state’s farmers are raising fish and growing hops, an ingredient for brewing beer.
Country mouse to city mouse:
I spent most of my life in rural north-central Iowa. Moving from a town with a population of 2,069, to Ankeny, population just under 50,000, the differing culture and demographics are obvious. So I was interested to hear Dave Swenson say the difference between rural Iowa and metropolitan Iowa in terms of economic recovery is “profound.” Those of us living in Iowa’s larger cities may feel that the economy is improving, but 60 percent of Iowa’s counties continue to see a drop in population, which stifles their ability to grow economically.
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