Results from the Iowa Association of Business and Industry’s latest quarterly business survey show Iowa employers entering 2026 focused on stability and continued business investment.

Key survey findings include:

• 66% say their business is growing heading into 2026, while 29% report flat conditions.
• 66% plan to make capital expenditures in the next quarter.
• 62% expect sales to expand in the next quarter, up from 39% in Q4.
• 58% report a neutral outlook for the economy in the first quarter of 2026.
• 37% plan to grow their workforce, with most others expecting staffing levels to remain steady.
• 54% believe Iowa is headed in the right direction going into 2026.

“Iowa employers are taking a focused and strategic approach as they plan for 2026,” Nicole Crain, ABI president, said in a news release. “While most respondents report a neutral outlook for the first quarter, they are continuing to make key investments in their business operations and people. Businesses are looking for consistency and predictability in an uncertain national environment. The survey reflects and reinforces why state-level decisions matter.”

Respondents consistently cited workforce availability and skills gaps, particularly in skilled industrial roles, as a top concern, alongside cost inflation, health care costs, regulatory uncertainty and the impact of tariffs and federal policy volatility.

At the state level, respondents emphasized several policy priorities they believe are critical to supporting Iowa businesses in 2026. These include property tax reform, remaining fully coupled to the recently approved federal reconciliation law, expanded workforce training and education pipelines, and policies that improve housing affordability, population growth and talent attraction, especially for younger workers and professionals in high-demand fields.

Despite some headwinds, respondents said they have identified opportunities for growth in 2026. Common themes included new market development, automation and artificial intelligence, process improvement and technology upgrades, mergers and acquisitions, and reshoring and onshoring of manufacturing activity.

Several respondents pointed to the importance of continued support of state incentive programs, such as manufacturing 4.0 grants, and the research and development of a tax credit program. According to ABI, the results suggest that Iowa businesses are navigating recent economic uncertainty by focusing on investments that increase efficiency and competitiveness over the long term rather than pulling back.