Iowa’s economy in July showed some of its first signs of positive movement since the coronavirus pandemic started, but still is fighting bearish indicators, the state reported Friday.
“COVID-19 has swiftly and sharply affected the Iowa economy along with the U.S. as a whole, July is the first month over month positive change since the COVID-19 crisis impacted Iowa,” the Iowa Department of Revenue’s report authors wrote.
In a separate report, the state noted that tax revenue fell $235.9 million, or 5.4%, from March 19 to Sept. 8, compared with the same period last year, before the pandemic hit. Much of the change came because of a delayed deadline for tax payments, the state reported.
Closure of casinos for part of the pandemic led to a drop of $74.5 million, or 50.3%, in gambling taxes between the March 17 closures and June 1, when casinos started to reopen, the report said.
The Iowa Leading Indicators index rose 0.1% to 103.3 from a revised June figure of 103.1, the revenue department reported. That marked the first increase after seven months of drops.
The index had dropped by 3% since February, before the pandemic spread across Iowa, shutting down businesses, schools and many government buildings.
Four of the eight parts of the index showed increases in July: residential building permits, new orders, diesel fuel consumption and average manufacturing hours. But economists were bearish about the state’s unemployment data, the national yields spread, agricultural profit futures and the stock market.
The state reported that the new analysis suggests “employment growth will weaken over next three to six months.”
Permits for new housing units in July totaled 1,484, up 42.4% from the previous July’s 1,042.
Despite an initial steep drop on vehicle miles traveled by passenger vehicles in Iowa, trucking continued at high levels. Sales of diesel fuel rose 3.7% in July over July 2019, the state reported.
In the stock market, 11 of 31 publicly traded companies based in or doing major business in the state saw increases in share prices, the state reported. The Business Record’s index of 18 Iowa -based companies found 12 of them saw increased stock prices in July.
The analysis of the state’s agricultural outlook, including solid meat profits but low corn and and soybean prices, came before the derecho damaged a large share of the corn crop Aug. 10.
The report found solid evidence of a contracting economy, not surprising considering the nation is in a recession. Bloomberg this week reported slow increases in jobs, same-store sales and restaurant reservations nationally, with a continued strong housing market.