(Radio Iowa) – The latest economic survey of supply managers in Iowa and eight other Midwestern states shows the business barometer falling to its worst January level in 15 years.

Creighton University economist Ernie Goss says the monthly report ranks the region’s economy on a zero-to-100 scale and he says fears about recession are growing. “The overall rating was down from 47.1 last month, December, to 47 this month,” Goss says. “Obviously, neither of those readings are good. They’re both below growth neutral and it’s the lowest January recording that we’ve had since 2008, so it was not a good month.”

The survey’s individual Business Conditions Index for Iowa dropped to 47.0 in January, down from December’s 47.8. Respondents in the nine states were asked to name and rank what they see as the top threats to their business and to the economy in the coming months. “Supply chain disruptions were number one, higher input prices number two, and recession number three,” Goss says. “What was surprising is finding and hiring qualified workers — labor shortages — was not in the top six, so that was a surprise to me.”

Ernie Goss

The survey points to slow, no, or negative growth in the months ahead, Goss says, likely through the second quarter. Looking ahead six months, the survey’s Confidence Index, which gauges economic optimism on a zero-to-100 scale, rose from 23 in December to 25 in January, which is still very weak. “Almost 26% reported workforce reductions, so instead of gaining, we’re reducing the size of the workforce,” Goss says. “The overall region when we look at compared to pre-COVID levels, we’re almost even. We’re down about 6,800 workers in the entire nine-state region from February of 2020.”

Only four of the nine states have rebounded to higher employment levels since the start of the pandemic: Arkansas, Missouri, Nebraska and South Dakota. According to the U.S. Bureau of Labor Statistics, Iowa’s average inflation-adjusted hourly wage rate fell by 3.7% during 2022.