Initial unemployment claims by Iowa manufacturing employees, which peaked at nearly 16,000 in late March, have tapered somewhat but still remain the highest among all of Iowa’s industry sectors. 

For the week ending June 6, initial claims in manufacturing still topped all other sectors, accounting for 2,080 claims filed, more than double the next-highest category, health care. In May, the state’s unemployment fund paid out $42.3 million in claims to unemployed manufacturing workers, or nearly 20% of the more than $219 million in total unemployment claims paid out last month. 

“Of concern to me right now are the consequences for Iowa’s manufacturing,” Dave Swenson, an associate scientist with Iowa State University’s Department of Economics, told the Business Record recently. “While nondurables (food processing) has gotten the bulk of the coverage, manufacturing initial claims have been quite high for several weeks,” he said. 

As there are substantial contractions in output in most of the major industrialized nations, including China, the European Union and Britain as well as the United States, Swenson expects substantial reduction in demand for many durable goods produced in Iowa.

Slowdowns in durable goods have strong multiplier effects to other regional suppliers of goods and services and inevitably lead to higher and more sustained unemployment, he said.

“Regional and national indexes for manufacturing are strongly in contraction mode,” Swenson said. “That’s not been talked much about, but that is a better indicator of the pace and pattern of recovery for a state like Iowa.”