Two-thirds of Iowa employers report their businesses are growing as they enter 2026, according to the latest quarterly survey from the Iowa Association of Business and Industry (ABI).
The survey found 66% of survey respondents say their business is growing, while 29% report flat conditions. Looking ahead to the first quarter, 62% expect sales to expand, up from 39% in the fourth quarter of 2025.
More than a third of employers plan to grow their workforce, with most others expecting staffing levels to remain steady. Additionally, 66% plan to make capital expenditures in the next quarter.
“Iowa employers are taking a focused and strategic approach as they plan for 2026,” said ABI President Nicole Crain. “While most respondents report a neutral outlook for the first quarter, they are continuing to make key investments in their business operations and people. Businesses are looking for consistency and predictability in an uncertain national environment.”
The survey showed 58% of respondents have a neutral economic outlook for the first quarter of 2026, while 54% believe Iowa is headed in the right direction.
Employers cited workforce availability and skills gaps as top concerns, particularly in skilled industrial roles. Other challenges include cost inflation, health care costs, regulatory uncertainty and the impact of tariffs and federal policy volatility.
Respondents identified several state policy priorities for 2026, including property tax reform, remaining fully coupled to the recently approved federal reconciliation law, expanded workforce training and education pipelines, and policies to improve housing affordability, population growth and talent attraction.
Despite challenges, employers identified growth opportunities in new market development, automation and artificial intelligence, process improvement and technology upgrades, mergers and acquisitions, and reshoring and onshoring of manufacturing activity. Several pointed to the importance of continued support for state incentive programs, including manufacturing 4.0 grants and research and development tax credits.
ABI surveys its board each quarter to track business sentiment and identify common concerns.
The Iowa Association of Business and Industry has represented Iowa businesses since 1903 and includes member companies from all industries and sizes across the state’s 99 counties. ABI members employ more than 330,000 Iowans.
