So, what indicators out there are keeping our industry experts and economists sleeping with one eye open? We wanted to hear what they are watching in 2016 and beyond. Here are 13 threats to the economy that could affect your business.

– Chris Conetzkey, editor of the Business Record

We asked: What is one threat to the economy that you are keeping a watchful eye on and why?

1. Rest of the world
Iowa needs the rest of the country and the rest of the world to buy what it makes. Slowdowns in demand from all trading partners affect Iowa agricultural and manufacturing returns, in particular. Growing U.S. dollar exchange rates may curb demand for Iowa commodity exports.

David Swenson
Associate scientist, department of economics, Iowa State University

2. Slow population growth
Per 100 births since 2010, Iowa lost 72 residents to deaths, lost four in net exchanges with other states and gained 14 from international migration for a net gain of just 38, compared with the U.S. average net gain of 61 residents per 100 births.      

Liesl Eathington  
Assistant scientist, Iowa Community Indicators Program, Iowa State University

3.  Demand for manufactured goods
One of the threats Iowa Workforce Development foresees in addition to the middle-skills gap is the decreasing demand for manufactured goods. Iowa’s economy is heavily reliant upon manufacturing – 14.3 percent of Iowa’s workforce in 2014 – and when the orders decline, it has ripple effects into most other sectors. Through 2014, manufacturing still trails the 2000 level by 34,800 jobs.

Beth Townsend  
Director, Iowa Workforce Development

4. Decline in farm finances
One threat would be a continuing decline in farm finances. If we see an increase in farm bankruptcies and large operations losing bank support, the psychology and optimism critical to supporting farming and farmland values could turn negative — something no one wants to see. 

Neil Hamilton  
Opperman Distinguished Professor, director of Agricultural Law Center, Drake University

5. Failure to pass the TPP
The failure to pass the TPP (Trans-Pacific Partnership free trade agreement) would be a lost opportunity for billions of dollars in exports. The TPP means products such as road machinery, agricultural equipment, medical equipment, aerospace technology, chemicals, financial services and food commodities would gain a competitive footing with other nations, which already have agreements in place.

Patricia Cook  
Director, U.S. Commercial Service Iowa

6. Energy prices
The uncertainty surrounding energy prices is the threat to keep an eye on during 2016. The uncertainty represents both a response to global growth concerns and a potential cause of greater problems. Understanding the global market mechanism underlying energy prices, especially oil, is crucial.

Tom Root  
Associate professor, Drake University’s College of Business and Public Administration

7. Retention of talent
We always keep an eye on what we are doing to attract and retain talented people in Greater Des Moines. Thanks in large part to the efforts of our business and community leaders, we have been successful at this, as the latest population numbers show. We must continue to be diligent. 

Mary Bontrager  
Executive vice president of workforce development/education, Greater Des Moines Partnership

8. Decline in new orders
We believe national economic momentum will continue into 2016, although energy will be less of a tailwind as prices are expected to stabilize. In Iowa, beyond the ever-present challenges to agriculture, the decline in new orders is concerning. Manufacturing could face additional challenges, potentially adding to unemployment and consumption headwinds.

Gregory Boal  
CEO and chief investment officer, Miles Capital Inc.

9. China
In the current environment, it’s hard to pin down just one issue, as there seem to be threats coming from all directions. But if I had to name one issue, it would be the threat of a hard landing in the Chinese economy and the spillover impact upon the global economy and financial markets. While direct trade linkages between China and the United States are modest (1 percent of gross domestic product), China has accounted for over a third of global growth since the recession. It is the world’s largest consumer of raw materials and the largest foreign investor in U.S. Treasury securities. A severe downturn in China would have powerful reverberations throughout the global economy, which would impact U.S. companies. 

Kim Butler Hegedus  
Managing director, The PrivateBank and Trust Co.

10. Emerging market slowdown
The threat that we are most concerned with right now is how will slower economic growth in China and much of the emerging world economy impact U.S. economic growth? We know that most of what drives U.S. economic growth is determined by what goes on within our own borders, and domestic demand appears to be fairly strong and stable. The portion of economic growth driven by developments overseas has been increasing, however, and booms in mining, agriculture and energy earlier this decade were largely driven by the emergence of China and other large developing economies, such as Brazil. The spillover from the slowdown in these nations could be worse and longer lasting than many currently expect.

Mark Vitner  
Senior economist and managing director, Wells Fargo Securities LLC

11. A strong U.S. dollar
The strong U.S. dollar is driven by China’s slowdown and the Federal Reserve’s higher interest rates. On the world markets, oil is sold for U.S. dollars. A stronger dollar drives down the demand for oil, depressing oil prices even further. My estimates show that that the recent $20 decline in oil prices is explained mostly by a stronger U.S. dollar relative to other currencies. 

Art Durnev  
Associate professor of finance, University of Iowa’s Henry B. Tippie College of Business

12. Declining oil prices
Lower-than-average oil prices have had a negative effect on the markets, especially the agricultural sector. If the trend continues, it could force employers to make cuts, which would negatively affect housing. Additionally, when commodity and stock prices fall, it typically drives investors to the bond markets. Rising bond prices tend to cause mortgage interest rates to increase.

Robert Burns  
President, Coldwell Banker Mid-America Group

13. Falling corporate profits
Corporate profits are one of the few indicators signaling recession right now. Company profits have been flat or falling for a couple of quarters. If corporate profits continue to fall, that is not only bad for markets but bad for Main Street. Falling profits lead to layoffs.

Robin Anderson  
Senior economist, Principal Global Investors