Iowa’s Economy. Headwinds? Or no problem?
It’s hard to know what to think these days. On one hand you have farmers on the news, along with John Deere crying foul on the tariffs. Not to mention the recent John Deere layoffs, just another addition to their never ending quest to trim the proverbial fat. But, then you take a little drive to one of the many expanding Des Moines suburbs, pick a direction; Ankeny, Waukee, West Des Moines, Altoona. What do you see?
Never ending housing develops seemly springing up out of fields like its the new corn.
One has to admit, the Des Moines skyscrapers have struggled for awhile, but they have seen better days. It’s a dystopian land of dichotomies, that is for sure, who would have thought it would come to the land of tall prairie grass? One minute you can be driving past the homeless with their cardboard signs of hope, and fifteen minutes later you can be in a suburban neighborhood with nary a house in sight that you could get for less than $750,000.
We Millennials who grew up collecting POGS and playing Yahoo Pool lived in our City on a Hill, human perfection achieved with no worries. But, here we are waking up to FBI raids.
Doesn’t this sound like some other place, not Iowa?
Whew! So what gives, I often ask myself this, dodging soccer moms in giant Tahoes, busy on their phones and drinking Starbucks. Is Iowa ok? Are the strong headwinds faced by our majority farming economy going to send us all unsuspecting victims into the doldrums?
Iowa’s economy by the numbers.
Ok, so how do we move from “finger in the wind” testing of Iowa’s economy to real hard facts? It’s easy to get caught up the greater macro-economics taking place around the country, and conflate that with what is actually happening in our local communities. If we want to look at the overall picture of Iowa over the last decade, where better to look than the GDP?
Here is the GDP chart in question, from 1997 till now.
What does this tell us? Well it seems apparent that overall we have become a more “productive” state, clearly seen here. I suppose this is a good thing generally speaking, and can easily be seen at the marco level when looking at say …
- the growth of industry around the center of the state (Des Moines)
- data centers entering the scene
- massive wind projects
- booming agriculture economy over the above time horizon.
- etc
This should be obvious to anyone living in the state for the last two decades. Sure, some areas have probably seen decline, but overall the state of Iowa has seen good economic times. Is this something particular to Iowa? Yes and no. Many of our other states have seen similar increases. It’s hard to “prove” if Iowa’s good fortune is due to local factors, like favorable tax structure of corporations, or just greater economic tides that lift all ships.
Probably both.
If you ask the average Iowan what sectors contribute to our economy, the answer is obvious, or should be, to anyone with the least amount of pride and knowledge (otherwise known as culture). Farming, finance, and manufacturing.
Here are the real stats below.
The good thing about this, to the trained eye, is the diversification of the contributors. This may be our saving grace in the future.
But what about right now?
Ok, so we know have a baseline for Iowa’s economy at a 10,000 foot view level, but what about right now? Hasn’t John Deere (manufacturing) been laying off globs off people over the last two years? Aren’t farmers in real trouble based on increased input costs, tariff and trade pressures? Isn’t this going to have a real impact on Iowa?
“… real GDP decreased at an annual rate of –6.1 percent in Iowa.”
– bea.gov
Indeed there are storm clouds gathering on the horizon. The question is, will those clouds turn into a full blown storm, or just sort of rumble and spit a few rain drops here and there? A 6% decrease in GDP isn’t anything to stick our noes up at, not if we are people who care about our state and the people around us.
I mean, 2000 jobs cut by John Deere in 2024 alone, those are probably majority middle class families who lived and worked in this great state, buying things, spending money, working in our communities. One would have to imagine this will only get worse, not better in the near future.
Who know’s what the future holds? Diving through the north side of Ankeny, a person would assume that all is well, in fact, more than well. Money appears to be flowing in from everywhere. I mean if you drive through The District, one would see brand new resturants, new buildings being finished, and large amounts of people apparently flush with cash … spending it.
Is that enough to ward off the fear mongers of economic doom? There are still rumblings of home sales slowing down, increasing credit card debt. Maybe everyone will continue on their ways until it all comes crashing down, ala 2008 again.
Clearly, based on the data, Iowa is facing some head winds that only appear to be increasing. Although other sectors of our diversified economy appear to floating the slackers.
Who can say if it will be enough? Can the insurance and finance industry of Des Moines keep the economy afloat? Can the trades in the suburbs pickup the slack off the 2000 laid off John Deere workers form 2024? If we only had a crystal ball.
One thing is for sure.
The “powers that be” ought to be taking notice, talking about it, and moving in a direction enticing new investment in Iowa, and shoring up what is already here.
I mean, have you heard Kim Reynolds say a single thing about John Deere and the jobs they have cut from our great state. Crickets. Might as well have never happened. I for one, would appreciate our politicians on both sides taking a serious look at Iowa’s current state of affairs, the manufacturing and farming troubles, and work to bring bipartisan ideas to bare that could assist in bring in new investments into our state.
Unfortunately, we live in a political time when looking out for the “Average Joe” is simply not on the menu.
What do you think?
What say you? Are you living and spending your money in Iowa, in our local community? Do think we have anything to worry about over the next decade? Where is the state of Iowa headed economically?
