Reports today from the Iowa Department of Revenue and the private Iowa Business Council reveal a state economy that is improving, although business leaders temper their optimism.

The state revenue department’s leading indicators index improved in October to 106 from 105.9 in September. Much of the growth was fed by robust numbers of residential building permits.

The 12-month moving average for building permits increased to 795 last month from 753 in September, the highest level since May 2008. There were 1,163 permits issued in October, up over 77 percent from a year ago.

The second most positive contributor in October was the national yield spread between long- and short-term interest rates.

The only other positive contributor was the new orders index which fell to 57.1 from the September value of 59.6, but was still above the value of 54.8 from one year ago, according to a news release.

Leaders of the state’s top 22 companies responded with mild enthusiasm to the Iowa Business Council’s quarterly survey, saying they expected sales, capital spending and employment to hold steady or show modest improvement.

The council’s Overall Economic Outlook Survey Index rose to 62, one point higher than three months ago and the same as this time last year, according to a news release.