South Corridor Companies Showing Stronger Growth Indicators than National and State Trends

ICAD Group’s Fifth Existing Industry Survey Forecasts Job Growth in Next 3 Years

(Iowa City) - New data collected and released by the Iowa City Area Development Group (ICAD Group) shows that primary sector companies in the Iowa City area remain poised for continued growth when compared to national and state figures. 

ICAD Group conducts confidential interviews with area interstate commerce executives annually to review business activities, discuss economic development issues, and forecast trends and opportunities for the Iowa City area.  This same tool is used by other economic development groups across the state and North America, allowing real time data comparisons on a variety of key performance indicators.

ICAD Group interviewed 60 area companies this year.  The six-page report is available for download online at www.icadgroup.com/advantages.

Ultimately, economic growth continues in the Iowa City area.  From the end of 2005 to June 2009, the Iowa City MSA saw 5.6% employment growth and we expect that number to continue to increase.  This year’s “Minding Our Own Businesses” report forecasts between 740 and 1,400 new, full-time positions for our area over the next three years.

Iowa City vs. National and State Data
Comparing data from the past two years with national and state surveys, the Iowa City area has a significantly higher level of growth and optimism.  The 2008 national data was captured before the full brunt of the recession hit, and ICAD Group anticipates the 2009 national data to be significantly lower across the board.

Overall, total revenues have taken a hit over the past 12 months.  While companies are still optimistic, 57% still planning to increase employment in the next three years for example, there has been a 9% reduction in workforce.

Data from 2008 and Q1 and Q2 of 2009 show local companies fared better than national and state trends, both during the beginning of the recession and into the economic collapse.  

The biggest area of disparity between local companies and the rest of Iowa is in company health.  Local firms continue to launch new and innovative products, keeping business in an emerging or growing state.  For the state of Iowa, only 31% of Iowa companies say their product life cycles are either emerging or growing, compared to at least 75% of local companies the past two years.

Why Iowa City?  Quality and Education of Workforce
When asked to cite why the Iowa City area continues to outpace national trends, employers were quick to recognize the quality and education of the workforce.   The two interconnected factors of education and labor comprised nearly half of the comments executives offered regarding the strength of our area.

When you compare the employment metrics in detail the picture becomes clearer as to how the local workforce benefits the innovation and competitiveness of local companies.  Local employers continue to rank our workforce higher than national and state averages in availability, quality, and stability.  Our productivity number peaked last year compared to the other groups, but remains on par this year.

What’s Ahead for ICAD Group?
While these signals remain positive there are certainly concerns and issues raised by local executives on the competitive climate of the area and state.

ICAD Group continues to work with employers to address specific recruitment and skill needs.   65% of those surveyed identified difficulty in filling specific occupations in this market.  Additionally, executives noted that prospective employees often have a lack of knowledge or preconceived rural image of our market and our state.
 
Our market continues to expand its base of private sector employment (from 52% private sector employment in 1990 to 64% in 2009), and it is important for community leaders to better understand the vital role interstate commerce companies play in this area.  ICAD Group has begun facilitating regular meetings with the manufacturing sector and local leaders to specifically address these concerns, and will help local governments keep an open dialogue with their interstate commerce companies.