They’re the words Iowa manufacturers have been waiting all year to hear: “Things are looking up.”

Iowa manufacturers expect increased sales, employment and capital investments in the first quarter (January-March), according to the results of the latest ABI Quarterly Iowa Business Survey.

ABI surveyed its board members in early December. The survey found: 

• 55% of survey respondents expect sales to expand over the next quarter.
• 52% expect the number of employees in their business to grow in the first quarter. That compares with 37% last quarter.
• 68% of survey respondents plan to make capital expenditures in the first quarter. That compares with 57% last quarter.

“The survey results are incredibly positive for Iowa’s economy,” said ABI President Mike Ralston. “This is a great way to build momentum as we begin the new year.”

About half of ABI’s 1,500 member companies are manufacturers. The association represents nearly every industry in Iowa.

The news isn’t all positive, however. Workforce shortages continue to plague Iowa manufacturers. “The biggest issue is finding people who want to work and learn a trade,” Ralston said. 
“Manufacturers are experiencing shortages at every level of their operation.”

The situation was made even worse by the pandemic. “Since we first started conducting these surveys in 2017, this is the most concerned I’ve seen ABI members about labor availability,” he said. 

Ralston said he’s hearing other indications of growth in the U.S. and global manufacturing industries. 

According to the U.S. Census Bureau’s Quarterly Financial Report for the third quarter released a week ago, U.S. manufacturing corporations’ seasonally adjusted after-tax profits in the third quarter of 2020 totaled $148.4 billion, a $100.3 billion increase from the after-tax profits of $48.1 billion recorded in the second quarter of 2020. 

The National Association of Manufacturers’ most recent Quarterly Outlook Survey, for the third quarter of 2020, showed that manufacturing optimism had rebounded to 66% since the second quarter of 2020, where it hit the worst reading since the Great Depression. Still, the outlook remains below the historical average of 74.4%, and 62% of manufacturers expect their firm’s revenues will not get back to pre-COVID-19 levels until 2021 or later.

The ABI survey results may be found at https://bit.ly/3gPnpBl.