Expected sales levels of Iowa’s largest employers have decreased slightly, cooling some of the optimism expressed by the state’s business leaders for the coming six months, according to the Iowa Business Council’s quarterly economic survey.

The Overall Economic Outlook Survey Index (OSI) for the second quarter fell to 65.3, more than a point lower than the first quarter, but three points higher than a year ago. The survey was completed by the corporate members of the Iowa Business Council during the second half of May.

The OSI sales index is 69, six points lower than last quarter (75) but two points above one year ago (67). Nearly all of the CEOs expect steady or increased sales over the next six months; about one-fourth said they expected no change in sales and 5 percent said sales will be substantially lower.

The capital spending OSI was 64, which is one point higher than last quarter (63) and four points higher than the second quarter 2010 survey (60), while the employment index of 63 was one point higher than three months ago and three points ahead of last year’s level of 60.
    
“The pace of business activity has been slightly tempered by volatility in oil prices, renewed fiscal instability within the European Union, and the spate of recent natural disasters worldwide” said Tom Aller, president of Interstate Power & Light Co. and 2010-11 chair of the Iowa Business Council.

“However, the overall sentiment of the Economic Outlook Survey index remains  positive. With Iowa’s business climate known for its strength and resiliency in times of uncertainty, generally we remain hopeful and confident about a strong second half of 2011.”