Creighton survey finds pandemic still holding down Midwest economy

OMAHA — The prolonged pandemic is dragging down vital sectors of the economies in Iowa and the Midwest, according to the latest survey from Creighton University.

Creighton economist Ernie Goss says business leaders in Iowa and eight other states were questioned about supply chain bottlenecks and other difficulties they’re experiencing as we approach the two-year mark of COVID-19’s influence.

“Approximately 87% of the supply managers indicated that they were sustaining transportation delays and that those delays were slowing production,” Goss says. “More than one-third of the supply managers expect supply chain delays to worsen in 2022, so the economy’s definitely slowing down a bit.”

The survey found only 12% of respondents anticipate improvements ahead. The January survey showed the overall numbers tumbling from December for Iowa and the eight other states. For the first time since the spring of 2020, the Midwest region lost manufacturing jobs in January. “The national and the regional numbers indicate that the manufacturing sector is slowing down,” Goss says, “and the overall economy, regional and U.S., will likely slow in the first half of 2022.”

Since the start of the pandemic, the survey shows Iowa has gained only 500 manufacturing jobs, for an increase of a meager o.2%. Compared to pre-pandemic levels, the region has lost 16,000 manufacturing jobs, Goss says, or a little over one percent. With inflation rates continuing to rise, Goss predicts interest rates will soon follow.

“I expect it and most economists expect it — the Federal Reserve is going to have to raise rates and they’ll have to raise them quickly,” Goss says. “I expect at least one percentage point increase in the short-term interest rates by the end of the year and even long-term interest rates are going to be rising. That will, of course, affect mortgage rates.”

What’s known as the Business Confidence Index also spiraled downward during January to its lowest reading since the beginning of the pandemic.