Iowa Businesses Eye Strategic Growth in 2026: A Look at Key Trends
Iowa’s business landscape is bracing for 2026 with a focus on calculated investment and stability, according to the latest quarterly survey from the Iowa Association of Business and Industry (ABI). While national economic uncertainties loom, Iowa employers are demonstrating a pragmatic approach, prioritizing long-term competitiveness over reactive measures. This isn’t just about weathering the storm; it’s about positioning themselves for future success.
The Growth Outlook: A Majority Still Expanding
A significant 66% of Iowa businesses surveyed anticipate growth heading into 2026, with 29% expecting to remain stable. This positive outlook is fueled by planned capital expenditures – 66% intend to invest in their businesses in the next quarter. Furthermore, sales expectations are climbing, with 62% projecting expansion, a substantial increase from the 39% reported in the final quarter of the previous year. This suggests a growing confidence in market demand and a willingness to capitalize on emerging opportunities.
Did you know? Iowa’s strong agricultural sector and growing advanced manufacturing industries are key drivers of this optimistic outlook. The state’s central location and robust transportation infrastructure also contribute to its appeal for businesses.
Workforce Challenges Remain a Top Priority
Despite the positive projections, a consistent theme emerged: workforce availability and skills gaps. Respondents overwhelmingly cited these as major concerns, particularly in skilled industrial trades. This isn’t unique to Iowa; a recent report by Deloitte estimates that manufacturers in the US could face a skills gap of 2.1 million workers by 2030. Iowa businesses are actively seeking solutions, with 37% planning workforce growth and a focus on expanded training and education pipelines.
Pro Tip: Businesses should explore partnerships with local community colleges and vocational schools to develop customized training programs that address specific skills gaps. Apprenticeship programs are also proving highly effective in attracting and retaining talent.
Embracing Innovation: Automation, AI, and Reshoring
Iowa businesses aren’t simply relying on traditional growth strategies. The survey revealed a growing interest in leveraging new technologies and adapting to shifting global dynamics. Key areas of focus include:
- Automation and Artificial Intelligence (AI): Companies are exploring AI-powered solutions to improve efficiency, streamline processes, and enhance decision-making. For example, John Deere, a major Iowa employer, is heavily investing in AI and automation for its agricultural equipment.
- Process Improvement & Technology Upgrades: Investing in modernizing existing infrastructure and adopting new technologies to boost productivity.
- Reshoring and Onshoring: A trend gaining momentum nationally, with companies bringing manufacturing operations back to the US – and Iowa – to reduce supply chain risks and improve control over production.
- New Market Development: Expanding into new geographic regions or customer segments to diversify revenue streams.
The ABI survey also highlighted the importance of state incentive programs, like Manufacturing 4.0 grants, in supporting these initiatives. These programs provide crucial funding for businesses to adopt advanced technologies and remain competitive.
Policy Priorities for a Thriving Business Climate
Iowa businesses are also looking to state-level policies to foster a supportive environment for growth. Key priorities include:
- Property Tax Reform: Reducing the burden of property taxes to make Iowa more attractive for investment.
- Federal Reconciliation Law Alignment: Remaining fully coupled with federal policies to maximize available incentives and support.
- Workforce Development: Expanding training and education programs to address skills gaps.
- Housing Affordability & Talent Attraction: Creating more affordable housing options and implementing policies to attract and retain young professionals.
These policy priorities reflect a desire for predictability and consistency in the regulatory environment, allowing businesses to focus on long-term planning and investment.
Navigating Headwinds: Inflation, Healthcare, and Regulation
While the outlook is largely positive, Iowa businesses are acutely aware of the challenges ahead. Cost inflation, rising healthcare costs, regulatory uncertainty, and the impact of tariffs and federal policy volatility remain significant concerns. Successfully navigating these headwinds will require agility, strategic planning, and a proactive approach to risk management.
Frequently Asked Questions (FAQ)
Q: What is the biggest challenge facing Iowa businesses in 2026?
A: Workforce availability and skills gaps are consistently cited as the most significant challenge.
Q: What industries are expected to see the most growth in Iowa?
A: Advanced manufacturing, agriculture, and renewable energy are poised for continued expansion.
Q: What role does the state government play in supporting Iowa businesses?
A: State policies related to taxes, workforce development, and incentives are crucial for creating a favorable business climate.
Q: Is Iowa a good place to start a business?
A: Yes, Iowa offers a relatively low cost of living, a skilled workforce, and a supportive business environment.
Want to learn more about Iowa’s economic development initiatives? Explore the Iowa Economic Development Authority website. Share your thoughts on the future of Iowa business in the comments below!
