Midwest Partnership EDC

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2 This report was created by the staff of Midwest Partnership EDC upon completing interviews and utilizing the Synchronist Business Information System.

3 Table of Contents Executive Summary.. page 1 Introduction. page 2 Business Profiles... page 3 Quality of Life. page 4 Community Services. page 5 Workforce page 6 Business Conditions.. page 7

4 Executive Summary Midwest Partnership utilizes a program called Synchronist for our Business Connections Program. In the spring of 2015, our team visited with 31 businesses throughout the region, in the counties of Adair, Audubon, Greene and Guthrie. The purpose of these semi-annual visits is to gain information and feedback on a number of topics including: workforce, utilities, transportation, community services, industry, business growth/decline, etc. This feedback allows the organization to identify and prioritize economic issues in the region, as well as report data to the Iowa Economic Development Authority, contributing to its annual BEST of Iowa Report. Advanced Manufacturing is the leading business sector in the Midwest Partnership Region, representing 32% of interviewed businesses. Regardless of industry, the number one issue concerning companies we met with is workforce: there is a shortage of skilled workforce. This is a recognized trend across the Midwest and greatly impacts the businesses in our region. Midwest Partnership continues to connect businesses with available resources, as well as partners with community colleges to continue developing targeted training programs to meet employer needs. Also in response to the widespread workforce shortage, Midwest Partnership collaborates with Western Iowa Advantage and IowaWORKS to host an Employer-Educator Summit in the fall, bringing businesses and educators together to discuss and find ways to retain our youth. Looking ahead, a strong majority of the businesses we interviewed plan to expand within the next three years. This is an indicator that businesses are growing as the demand for their products increase. Midwest Partnership anticipates assisting with a number of these expansion projects in one way or another. Additionally, while the majority of business headquarters are local, some company headquarters are not located within our region, yet affect our local economy. A priority for Midwest Partnership in 2016 will be to visit those corporate headquarters to conduct similar interviews. Overall, the Business Connections Program is a necessity to rural economic development. Regular communication with businesses and organizations allows Midwest Partnership to facilitate growth of existing businesses and to promote the West Central Iowa region to prospective businesses. 1

5 Business Connections Program What is Midwest Partnership EDC? Midwest Partnership is an economic development corporation serving Adair, Audubon, Greene and Guthrie Counties in West Central Iowa. Midwest Partnership is the region s connection to a variety of business resources, and provides information and assistance with business retention & expansion, new development, and small business & entrepreneurship. What is the Business Connections Program? Midwest Partnership interviewed businesses & organizations in the region to gain their feedback on a number of issues: workforce, community services, industry, business growth/decline, etc. The feedback allows the organization to identify and prioritize economic issues in the region. Midwest Partnership also tries to learn about each business to understand their needs and connect them to the right resources. Communicating with the businesses and organizations allows Midwest Partnership to grow the existing businesses and promote the West Central Iowa region. 2

6 Business Profiles 31 = number of participants Midwest Partnership conducted 31 interviews with businesses across Adair, Audubon, Greene & Guthrie counties. The majority (32%) of the businesses interviewed are from the manufacturing industry, with agriculture and health care following at 16%. Manufacturing: leading business sector in region Iowa Workforce Development s 2015 Industry Profile summarizes, In 2014 manufacturing supplied 216,887 jobs to Iowans, which represented 14.3 percent of all employment (both public and private sector). This sector had an annual average wage of $54,401. This is 27.9 percent higher than the statewide average of $42,536 for all industries. Source: Iowa Workforce Development, Employment Statistics Bureau Agriculture: 2 nd leading business sector in region Iowa Workforce Development s 2015 Industry Profile summarizes, In 2014 the agriculture, forestry, fishing and hunting sector comprised 1.3 percent of all covered employment (public and private sector) in Iowa. This sector reported an average annual wage of $37,161 for Animal production employed 10,547 (55.2%) of all sector employment, while crop production employed 4,871. The majority (68%) of businesses reported that their headquarters are at the current location in the Midwest Partnership region. Of all of the businesses interviewed, 90% said that they conduct office operations (sales, marketing, technology, etc.) at that location and 45% responded that they include research and development in their operations and budget. 3

7 Quality of Life Small town values Positive attitudes, good reputations Anybody will do anything to help Good work ethic Good schools, hospitals, and businesses Community services and support You know who you re dealing with Hometown feel, family-like atmosphere What are the community s strengths? The responses from the businesses on what they believed were their community s strengths were very centered on the idea of small town values and the well-known Midwest work ethic. Words that were used to supplement those feelings were: loyalty, positivity, farm-raised, quality, pride, support, etc. The quality of life and employee work ethic categories found in Midwest Partnership s four counties align across Iowa, with 24.71% and 11.17% of the responses, respectively, as noted in the State s BEST of Iowa report (2015). Community Weakness: Workforce The businesses were asked what they felt was a weakness in their community. Although there were a few responses indicating the need for more entertainment and recreation in their towns, the number one response across the four counties was a lack of a skilled workforce. Labor skilled & other were the number one and two responses, respectively, at the State level as well, from the BEST of Iowa report (2015). According to that same report, skilled labor is the most commonly stated community weakness at the national level. It is important to note that the responses to both strengths and weaknesses are perceptions of the business leaders, however, a shortage of skilled workers appears to be a national trend that deserves attention. As a regional economic development agency, Midwest Partnership prioritizes this issue and will continue to bring awareness to workforce programs and partnerships. 4

8 Community Services Utility providers vary across the four counties, but the numbers in the tables are combined average levels of satisfaction with services. The businesses were asked to rate their levels of satisfaction on a scale of 1-7 (1=low, 7=high) for the utility services provided in their communities. From the Utility Satisfaction Levels chart, natural gas landed the highest level of satisfaction with the services provided across the four counties with a rating of 6.08, whereas internet had the lowest rating with Midwest Partnership will be able to focus priorities on internet and telecommunications in 2016 to provide a more conducive business environment. Fire Protection 6.15 Emergency/ Police Protection 5.96 Health Services Health Care 5.85 Youth Services Community Services Utility Rating, by County (1-7 scale) Ambulance/Paramedics 5.62 Schools (K-12) 6.00 Community/Tech College 5.82 Colleges & Universities 5.68 Child Care 5.33 Local Economic Development 5.96 Community Planning 5.87 Zoning Changes & Permits 5.83 Regulatory Enforcement 5.75 Community Services 5.70 Chamber of Commerce 5.61 Workforce Services 5.58 County Services 5.55 Local Streets & Roads 5.42 Property Tax Assessment 5.39 Highways 5.29 Water Sewer Natural Gas Electric Telephone Internet Adair Audubon Greene Guthrie Businesses were also asked to rate community services on the same 1-7 scale (1=low, 7=high); the average of the ratings can be seen on the table to the left. Fire protection has the highest rating on the table, scoring a Satisfaction with highway conditions rates the lowest with 5.29, however, it is still above Iowa s average of 5.16 in 2015 (Best of Iowa, 2015). Also noted in the Best of Iowa 2015 report, every category in the table had an increase in ratings for the state compared to last year. The major advantages identified in the report, when compared against the national averages, were: schools (K-12), tech colleges, zoning changes & building permits, community planning, and community services. The responses at all levels are the perceptions of the surveyed business leaders and how the services positively or negatively affect them personally, their employees, and/or their business.

9 Workforce Source: BEST of Iowa Report 2015 On a scale of 1-7, businesses were asked to rate their perception of the current labor pool based on stability, quality, and availability. As mentioned earlier in the report, workforce availability is an issue plaguing the entire state, and given a rating of 4 for the state and 3.39 for the Midwest Partnership region. Workforce stability looks very positive, however, with a rating of 5.19 in the region. It was stated in one of the interviews, when we get good, quality employees, we have no problem keeping them. The majority of the businesses reported having trouble recruiting for jobs with technical, trade-related skills. Other positions that businesses are having trouble filling include managers (in general), nurses, bus drivers, administrative assistants, and others specific to the company. When businesses believe if community or industry hinders talent recruitment, 40% said the community/ location doesn't provide enough options, 33% said the industry itself is having issues with maintaining viable employees, and 27% said that both community and industry have limited their search. Every single business in the survey invests, in some way, to employee training. Understanding the workforce issues, businesses in the region are increasing on-the-job training. The results determined that 74% of businesses are increasing their employee training, while 26% remain stable in their current plans. As part of their training budget, 67.7% of the businesses invest some of that money in training new skills, 74.2% invest in proficiency training, and 54.8% invest in remedial training. 6

10 Business Conditions Global Markets 51.6 = percentage of interviewed businesses that have international sales Regional Expansions Sixty-nine percent (69%) of the businesses said that they already had plans in place to expand in the next three years. The estimated investment planned for all of the reported expansions is over $500 million, spread across purchases of new equipment and technology and additions to the facility, as well as creating new positions for employment. The primary market of the majority (43%) of interviewed businesses is at the national level, however 51.6% of the interviewed businesses have some portion of international sales. Of that 51.6% of businesses with an international market, majority of the international sales are either increasing or stable. The majority of international sales in the businesses account for 1-20% of their total sales. While the majority of businesses have locations locally or regionally, a couple have locations outside of the United States as well. In 2012, only 43% of the surveyed businesses said that they would have expansions planned in the next three years. Although not all of the businesses said that they have plans to expand, 77% said that they have the room to expand at their current location in the region in the 2015 survey. The businesses also predict an estimated 130+ additional employees in their plans for growth, whereas in 2012 only 20 additional employees were predicted. 7

11 Business Conditions The majority of the businesses are in a growth stage with 59% reporting a growing business life cycle. When asked about total company sales, 66% have increasing sales, while 17% are stable and 17% are decreasing. Comparing the 2015 results to 2012, 55% of the businesses reported increasing sales in 2012, while 30% reported stable sales and 15% decreasing sales. New Product Growth Ninety percent (90%) of the surveyed businesses reported that they introduced new products, services and/ or capabilities in the last 5 years; some of the new business advancements were due to changes and availability in technology. In 2012, 73% of businesses anticipated a new product in the next 2 years. Also in 2012, 77% of businesses introduced a new product in the last 5 years. The anticipation for new products, services and capabilities in the 2015 surveyed businesses over the next 5 years is at 86%. Overall, in the last 3 years, businesses have seen growth in their capabilities. Technology Technology has played, and will continue to play, a significant role in the businesses production 65% of the respondents noted that there would be new technology emerging in their products, services, or capabilities. Additionally, 70% of the businesses reported that the technology infrastructure in their communities was adequate for their needs. 8

12 Midwest Partnership EDC 615 S Division Street P.O. Box 537 Stuart, IA info@midwestpartnership.com