Last week, some top economic experts in Iowa shared their insights and opinions about the 2015 economy with a capacity crowd at the Business Record’s annual Economic Forecast luncheon. I, sadly, came down with a nasty bout of the stomach flu and was unable to moderate the event. So, in classic boss fashion, to keep me in the loop, I had each member of the staff report back on what they learned from the event. Well, that’s fudging it a bit. We planned for each of our reporters to pull away a few nuggets for those who couldn’t attend or for those attendees who want to share with staff members who couldn’t attend. I will say, having not been there, I’m greatful for the recap, which includes great thoughts from our panelists: Larry Zimpleman, chairman and CEO of Principal Financial Group Inc.; Don Pearson, lead region president of Wells Fargo Bank; Debi Durham, director of the Iowa Economic Development Authority; and Art Durnev, associate professor of finance, University of Iowa Henry B. Tippie College of Business. Here’s what each of our reporters were talking about as they drove back to the office. 
– Chris Conetzkey,  editor of the Business Record

Kent Darr – Senior Staff Writer

Danger in the rocks

Larry Zimpleman tends to take a global view of the economy, and with the Iowa and U.S. economies churning away with relative ease, he can see threats in faraway places. One of those is a stretch of islands and rocks in the East China Sea, disputed territory between China and Japan. We are bound through treaties to protect Japan’s interests in the area, and, well, nobody in their right mind wants to antagonize a major trading partner such as China. For Zimpleman, the dispute is one of those head-scratchers that could lead to a big economic headache.

To boost the Iowa economy, who you gonna call? 

Corn busters! Let’s face it, corn and soybeans generate a lot of cash, and risk, for the Iowa economy. Eric Taylor of Central Bank said Debi Durham hit the right note when she called for diversifying the state’s economy by shifting some focus to value-added production processes. 

Feeling bullish

You have to like a straight-talking banker. Wells Fargo Bank’s Don Pearson kept his closing remarks short and sweet. “I’m just bullish on the economy,” he said. He summed up the overall tenor of the Economic Forecast.

Megan VerHelst – Staff Writer

Iowa? Or New Zealand?

After panelists were asked their predictions on how the economy will change in 2015, Art Durnev was the only person to predict it will “regress slightly.” So why, when the other participants all predicted a slightly improved economy, did Durnev zag? Durnev said he asked himself prior to the event, if Iowa were a country, what country would it be? The answer was New Zealand. Both Iowa and New Zealand have similar populations and similar industries, but the difference is where Durnev staked his point. Iowa is more susceptible to the global economic shocks, like deflation, with the inability to do much about it.

Labor shortage is worldwide, so broaden your outlook

When discussing Iowa initiatives to satisfy the demand for skilled workers, panelist Art Durnev pointed out that the shortage is not just an Iowa problem; it’s a global problem. The key to being competitive and retaining skilled workers, he said, is to identify and predict technology trends and anticipate how that landscape will change. “We’re at the beginning of the next Industrial Revolution. Drones will deliver your packages; computers will do things for you,” he said. “What you consider skilled today might not be the same tomorrow. Try to think 10 or 15 years ahead.”

Perry Beeman – Senior Staff Writer

Iowa economy on the rise, but don’t expect a boom

Zimpleman agreed with several other speakers that Iowa’s economy should improve this year, but not by leaps and bounds. “Iowa has been outperforming the national economy for a number of years,” Zimpleman said. “I am in the improve-slightly sort of camp (about 2015 prospects). That is not a negative. I do think it is going to be a little more difficult year for agriculture.”

What happens in Ukraine can be bad for Iowa

Durnev said Iowa is affected by negative forces around the globe. He said Russia’s tension with Ukraine doesn’t help. And neither does the deflationary pressures in Europe. “When prices go down, investors don’t invest and consumers don’t spend because they think they will get a better price tomorrow,” he said.

Cash on the sidelines; tax credits uncertain

Durham said the fact that many companies sat on a lot of capital in 2014 held growth back, and the government needs to encourage investment. “We need to cut the national corporate income tax,” she said. And she wouldn’t stop there either. “We should make research and development tax credits permanent,” Durham said. “That is the one thing we need to do to make sure our companies are strong and innovative.”

Fear: New regulations will lead to tight money

Zimpleman said he fears that a new round of regulations on capital requirements will limit the availability of loans. He said finance firms “are the engines that fuel the economy.” He added that every dollar that has to be set aside for capital requirements means setting aside eight to 10 dollars in loans that might otherwise have been available.

Joe Gardyasz – Senior Staff Writer

A wish list for Washington 

Asked what three priorities Congress should focus on, Durham was quick to provide her top picks: 1. Enact more trade agreements to promote further international trade opportunities for Iowa. 2. More federal transportation funding to address infrastructure needs. 3. Passage of a national energy policy.

Unintended consequence 

Responding to a question from the audience about the effect of the Affordable Care Act going forward, Zimpleman said one unintended consequence is that health plans will become much more a commodity and no longer as useful as a benefit employers can use to compete for talent. He also asked for a show of hands of how many attendees had heard of private health insurance exchanges, and only a smattering of hands went up. Zimpleman predicted that over the next 10 years, between 30 and 50 percent of companies will outsource their health coverage through private health insurance exchanges, which are “growing like Topsy.” Accordingly, he expects a big trend away from employers picking up the majority of the tab for health insurance costs within the next 10 to 15 years, he said. 

And now a word from our sponsor … 

Steve DeVenney, branch manager of Raymond James, said his office is anticipating stock portfolio returns of 8 to 12 percent in 2015. “We are cautiously optimistic for a good year for the market,” he said.