Iowa companies projected increased sales and employment levels for the next six months, according to the Iowa Business Council Economic Outlook Survey Index released today. The overall index remained at 66.3 for the second consecutive quarter and up from 64.7 in the third quarter 2007.

The first-quarter 2008 sales OSI increased to 73, five points higher than the 2007 fourth-quarter results. The response rate for “substantially higher sales” helped increased from 5 percent last quarter to 18 percent, reflecting IBC corporate members heightened confidence levels in consumer purchasing.

The capital spending OSI for the 2008 first quarter dropped eight points to 63 from three months ago. More business leaders surveyed expect “substantially higher” capital spending, up from 11 percent last quarter to 18 percent in the first quarter of 2008. However, 12 percent of the members project “substantially lower” capital spending over the next six months.

The first-quarter 2008 employment OSI rose three points to 63. Ninety-four percent of IBC corporate members said they will maintain or increase hiring, consistent with the results from the previous quarter. Fifty-three percent of the members expect their employment levels to be higher in the coming six months. However, 6 percent predicted lower employment levels.

“The outcome of this survey reinforces the importance of maintaining a diverse business community in Iowa, one that continues to benefit this state and its citizens in uncertain economic times,” said Max Phillips, IBC chair and president of Qwest-Iowa.

IBC surveyed 17 corporate members during the third week of February. The quarterly IBC Economic Outlook Survey incorporates a diffusion index; each survey response falls on a 100-point scale. Using weighted averages, an index number is calculated that measures the response of IBC executives projecting business activity for the next six months. An OSI above 50 indicates the response is positive; below 50 is negative.