2024 Business Index
September 18, 2024
Bank Iowa released the results of its second annual survey of Iowa businesses. The Bank Iowa Business Index tracks Iowa business sentiment on issues related to a range of topics — from the local economy and labor challenges to the plans they have for the future of their operations.
As one of the leading independent ag banks in the state, Bank Iowa’s investment in market research reflects its promise to deliver consultative financial services to Iowa’s businesses and the range of communities that depend on them. As Bank Iowa President & CEO Jim Plagge put it, “Although we capture a lot of insight in conversation with business owners, layering data intelligence on top of those insights gives us a much clearer picture of the current business environment.”
A full report contextualizing the survey data is available here. The below takeaways represent some of the 2024 survey’s most notable findings.
Economic Pinch Pushes Pricing North
Iowa businesses appear to have felt the pinch of a still-shaky financial environment in the last year. Participants in the 2024 Bank Iowa Business Index, which polled business owners during January and February 2024, named costs of goods (56 percent), the economy (55 percent) and interest rates (34 percent) as the top three factors that negatively impacted their operations in the last 12 months.
In response to the increased expense of doing business, 73 percent of survey participants increased pricing in the last 12 months.
Pushing pricing north may have been the correct move, however, as very few survey participants reported a decrease in their sales. In fact, a full 83 percent said their business either increased (25 percent) or remained steady (58 percent) over the last year.
Making Do with Existing Employees
Although the state’s workforce continued to rank highest on participants’ list of advantages to owning an Iowa business, few are currently hiring. Seven in ten Bank Iowa survey participants said they have no open positions.
A perceived lack of workers to fill open positions may factor into the decision to hold on hiring. Nearly half (47 percent) of respondents believed the talent pool decreased compared to the prior year.
Most participants still find the level of skills among those applying for open positions adequate. Six in ten of those hiring said the quality of candidates who applied for open positions either increased (13 percent) or remained steady (48 percent).
Mindful of Hype Cycle, Value Stability
Despite rampant industry and mainstream buzz, Iowa businesses do not seem tempted to jump aboard the artificial intelligence (AI) train. Nearly eight in ten (77 percent) said they did not integrate AI technology or tools in the last 12 months. Another 59 percent said they do not plan to incorporate AI into their business in the upcoming year.
Large investments in technology are not indicated by the findings either. Just 19 percent expect to take out a business loan in 2024. Low interest in fintech was also apparent in the survey. Fewer than 3 in 10 (26 percent) are planning to integrate digital payments in the upcoming year, and just 19 percent are looking to upgrade accounting software.
What’s more, nearly 30 percent of the businesses who participated in Bank Iowa’s study still use paper checks to process payroll. Business use of checks is trending down rapidly, though. Last year, 56 percent said they paid employees with checks.
Slow and Steady Wins
Summarizing this year’s Business Index findings, Bank Iowa Vice President of Treasury Management Amber Weger said she was not surprised to see the ‘slow and steady wins the race’ sentiment. “Stability and consistency are highly valued by most of the businesses we work alongside,” she said. “Iowa remains one of the best places to start and main a business, and a lot of that has to do with the savvy risk management and incremental growth of our state’s firms.”
About Bank Iowa
With more than $2 billion in assets, Bank Iowa ranks as one of the leading independent ag banks and the second-largest family-owned bank in the state. Farmers, families, and businesses access Bank Iowa’s products and services through more than 20 locations, as well as online and on mobile devices. To learn more, visit bankiowa.bank. Member FDIC. Equal Housing Lender.