Business sentiment for the third quarter of 2008 is down slightly from the previous quarter, but local businesses are still planning to increase employment levels over the next six months, according to the Iowa Business Council (IBC) Economic Outlook Survey.

The 2008 Q3 IBC Overall Economic Outlook Survey Index (OSI) was 63.3, down one point from the second quarter and lower than 64.7 a year ago.

Of the 19 IBC corporate members surveyed, 74 percent expect sales to be higher or remain the same during the next six months, while 26 percent expect lower sales. These responses brought the 2008 Q3 Sales OSI to 63, eight points lower than last quarter.

The capital spending index also decreased to 65 from 66 in the previous quarter. The majority of IBC corporate members (53 percent) expect capital spending to increase, and 37 percent expect it to stay the same through the next six months.

Meanwhile, the IBC Employment OSI was 62, six points higher than three months ago and two points ahead of last year. Fifty-three percent of IBC members expect their companies to increase current employment levels, and only 11 percent foresee reduced hiring activity.

“The news from the survey this quarter is that while sales and capital spending indicators are lower, many large corporate employers still expect to maintain or increase hiring levels as we start anticipating business activity in 2009,” said Max Phillips, IBC chair and president of Qwest-Iowa & South Dakota, in a release.