Iowa’s economy continued to grow in October, behind strengthening employment and increases in various manufacturing indicators, according to a monthly survey of supply managers in nine states.

The Mid-American Business Conditions Index for Iowa increased to 78.7 in October, up from 67.1 in September. For the region, the index rose to 70.2, up from 65.1 in September, according to a report released this week.

The survey, conducted by Creighton University, measures manufacturing performance in categories including new orders, production or sales, delivery lead time, employment, and inventories. The index ranges between zero and 100, with an index greater than 50 indicating an expanding economy over the next three to six months.

It was the fifth consecutive month of growth for the region, after the index fell to its lowest level in 11 years in April as the coronavirus pandemic spread across the country. The index also reached its highest level since 2004 in October.

Ernie Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business, cited dropping unemployment as a contributing factor in Iowa’s improving economy.

“Validating a rapidly improving state economy, U.S. Department of Labor data indicate that the state’s insured unemployment rate stood at 1.7% in the second week of March, peaked at 12.4% in the first week of May, and fell to 2.6% in the third week of October,” Goss said in the report.

Other components measured in the survey also showed strong performance. The index for new orders in Iowa was 82.1; production or sales was 71.2; delivery lead time at 69.3, employment at 80.9 and inventories at 93.4. 

Regionally, Goss said the results of the monthly survey have “mirrored the national manufacturing survey results indicating that the manufacturing sector has been expanding at a very healthy pace since sinking to a post-2008 recession low in April.”

“Even so, current output in the regional and U.S. manufacturing sectors remains below pre-COVID-19 levels,” Goss said. “More than three of four supply managers reported negative COVID-19 impacts.”

Highlights from the October survey:

• The regional Business Conditions Index expanded to its highest level in 16 years.
• Almost 78.6% of supply managers reported shortages of qualified workers to fill open positions.
• Export and import readings for the month were very strong.
• The employment gauge soared to its highest level in more than two decades.
• More than 3 out of 4 supply managers reported negative COVID-19 impacts.

The other states that are included in the monthly survey are Arkansas, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.