Iowa City metro area expected to grow


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In line with national trends, the Iowa City metropolitan area is expected to experience both slight economic growth and a drop in unemployment this year.

According to a recent report by the U.S. Conference of Mayors, the Iowa City area will see a 2.9 percent growth in its gross metropolitan product and a 2.2 percent growth in its employment.

It is the only metro area in Iowa projected to have job growth above 2 percent.

Iowa City joins nearly every metro area in the country in this forecast, which Beth Ingram, a University of Iowa associate provost and economics professor, attributes to simple economic theory.

“When you come out of a recession, you experience economic growth,” she said. “Recessions always turn around.”

The report cited the budget deal that passed late last year as one cause of the projected growth. Ingram said that the deal provided more certainty of the government, which is more favorable to the economy.

The budget deal alleviates federal programs of many automatic spending cuts from last year, and it will put a stop to forced employee leaves and staffing reductions.

“One of the drags on the economy over the past couple of years has been the lack of hiring by the government,” Ingram said. “If [people] have jobs and they can spend their incomes, then the economy improves.”

However, Ingram expressed reservations about the percentages.

“Honestly, a [2.2] percent growth rate is a little bit slow compared to a normal recovery,” she said.

She said that economists are still trying to cement the reasons for why this recovery has progressed more slowly and shakily than usual.

The report also cited accelerated business investment as another reason for its projected growth, which Iowa City economic-development coordinator Wendy Ford said she has noticed in Iowa City.

“With the apparent turnaround in the economy, many area businesses are expanding,” she said. “For some, that means a move and, for others, that means adding new employees.”

Ford also said that the effects of the recession have been less pronounced in Iowa City than in many other places in the country.

“We were fairly insulated from the extremes of the downturn in 2008,” she said. “I think that this community is well-suited for a creative economy, which is one that caters to people and companies with knowledge coming from the University of Iowa.”

Iowa City Councilor Rick Dobyns listed the city’s neighborhood-stabilization programs, investment in roads and infrastructure, and involvement in affordable-housing initiatives as approaches that have kept people both and in and spread around the city, which in turn make the city more attractive to businesses.

“These things help the city quite a bit because businesses are very interested in making sure that they have a good, strong workforce,” he said.

This year, only seven metro areas are not expected to grow. In 2013, that number was 97.  

“It’s not going to be obvious, but things will start to feel a little bit better and we’re going to feel like more people are getting jobs,” Ingram said.

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