With stock markets at record highs and unemployment near record lows, it seems odd that the business community is entering the new decade with such economic anxiety. That is exactly where we find ourselves, however, with trade wars, a turbulent political environment and now the potential for conflict in the Middle East all conspiring to sap business confidence ahead of an oft-imagined recession sometime later this year.
The question now is whether business owners and entrepreneurs will succumb to that anxiety and turtle inward, or fight through it for another prosperous year.
A variety of new index readings over the past few weeks have been fodder for the pessimists. The Institute for Supply Management’s monthly manufacturing index dropped to 47.2 in December – the lowest reading since June 2009 – while Creighton University’s Rural Mainstreet Index softened to 50.2 in the same month, just above the growth-neutral point of 50.
The Iowa Leading Indicators Index in November reached 107.1, its highest point since May, thanks to a hot stock market and increased diesel fuel consumption. But it also showed that weekly unemployment claims are inching up, while manufacturing hours and new orders are heading down.
The good news is that Iowa business leaders appear to be taking the news in stride, with both the Iowa Business Council and the Iowa Association of Business and Industry recently reporting that their members expect higher sales and more capital spending in 2020.
Things could improve even more if President Donald Trump follows through with his pledge to sign a “Phase One” trade deal with China this week. That deal calls for China to purchase $40-$50 billion more in U.S. agricultural goods annually, in exchange for a reduction in tariffs. The slow but steady movement of the U.S.-Mexico-Canada Agreement (USMCA) trade pact, now up for consideration by the full Senate, will provide a similar boost if passed – a prospect that looks likely.
If the economy is a confidence game, this feels like an opportunity for the business community to advance the ball. Diminishing confidence can make fear of an economic downturn a self-fulfilling prophecy. While we don’t advocate taking unnecessary risks, let’s approach 2020 with an open and positive mind.
Most Influential response
The CBJ’s annual Most Influential list, released Dec. 23, has been generating passionate debate online about the dearth of women on it (three this year).
It’s a discussion that we welcome and expect to continue as we work to elevate the profile of the many gifted women leading companies and organizations in our region, through our weekly news coverage and our Women of Influence awards. While some have taken issue with our publication of the list or failing to adjust the results, we feel it simply offers a mirror in which to see the region – one that has not come as far as many of us would like.
With many high-profile regional leaders such as Dee Baird, Lois Buntz, Nancy Kasparek, Sally Mason and Nancy Quellhorst now in new roles, we will work to highlight the next generation of female leadership. We see that in emerging professionals like Kristin Roberts, the new president and CEO of the United Way of East Central Iowa, and hope that our readers are paying attention ahead of our next Most Influential vote. •