Despite pressures from a weakening housing market, Iowa business leaders remain confident about the state’s economic condition over the next six months, according to the Iowa Business Council Economic Outlook Survey, completed during the third week of August.

All 20 of the business leaders who participated in the survey expect their organizations to maintain or increase sales volumes. Five percent expect to lower capital spending (a five percentage point improvement over last quarter). However, 10 percent of those surveyed expect to reduce employment in the next six months; this is the first time in nearly two years that the survey indicates a softer hiring environment.

“The global impact of the subprime lending situation could have limited effect, in various measures, on Iowa Business Council companies with broadly based business activities, sales markets and supply chains,” said Max Phillips, IBC chair and president of Qwest-Iowa, in a press release. “However, the swift reaction of American, European and Asian bank authorities to infuse reserves into the banking system appears to be having a calming influence. These actions also reaffirm confidence in what is otherwise perceived to be a mostly healthy global economy. Except for companies with unusually heavy exposure to subprime lending, the short-term effect to the Iowa economy appears minimal, and IBC companies remain confident about their business operations in this state.”

The survey includes a new feature, an index that measures IBC executives’ sentiment on a 1 to 100 scale. The 2007/Q3 Economic Outlook Survey Index was 64.7, a positive sentiment compared with an average of 50.

For the complete report, visit www.iowabusinesscouncil.org.