Results from the Iowa Association of Business and Industry’s second-quarter Business Survey show growing optimism among Iowa employers, alongside continued challenges related to workforce availability, health care costs and policy uncertainty.

According to the survey, 62% of respondents expect sales to expand in the next quarter. More than half, 57%, plan to increase their workforce, up from 37% in the first quarter. Capital investment plans also remain strong, with 71% of respondents planning expenditures, including 19% anticipating significant investments.

Overall economic sentiment also improved, with 48% of respondents reporting an optimistic outlook, compared with 37% in the previous quarter.

“We’re seeing growing confidence among Iowa employers heading into the second quarter, even as uncertainty remains in today’s economy,” ABI President Nicole Crain said in a prepared statement. “The results reinforce the need for consistency and clarity as businesses continue investing and navigating challenges.”

Workforce shortages remain the top concern among respondents, followed by rising health care costs, supply chain pressures and energy costs. Open-ended responses also pointed to ongoing tariff instability, property tax proposals and broader federal policy uncertainty.

The findings align with national trends, including recent reports from the National Association of Manufacturers showing increased optimism among U.S. manufacturers alongside continued concerns about trade uncertainty and input costs.

ABI conducts the quarterly survey of its board members to track business sentiment, identify common concerns, and inform its advocacy and programming priorities.