Business Analysis Shows Positive Potential
ALGONA, Iowa – While the economy seemingly continues to stagger around in the dark looking to find its feet, there are a couple of bright lights shining in Northern Iowa.
Based on the Kossuth/Palo Alto County Economic Development Corporation Business Surveys and analysis from the Institute of Decision Making at the University of Northern Iowa these counties aren't simply cruising along, but are positively poised for future growth.
“We are very pleased with the end result and that projections show that there are potential expansions on the horizon, the quality of workforce is rated very high and increases in employment are looking favorable,” said Maureen Elbert, Executive Director of Kossuth/Palo Alto County Economic Development Corporation. “So this document gives us a good reading on our economic business climate and (we) feel businesses took the necessary measures needed to weather the economic downturn. This is very encouraging for a gradual change in our region.”
Overall, existing businesses participating in the surveys are pleased with the business environment in both counties. In Kossuth County 90 percent of the 106 entities surveyed rated it as good or excellent. In Palo Alto County 70 percent of 86 participants gave their county the same high marks.
The positive outlook isn't limited to immediate future. About half the businesses surveyed in each county plan to expand within the next five years, according to the report and about 20 percent of them say their plans include adding employees. It's not just optimistic bluster wither: nearly 60 percent of them presently own or lease land sufficient for supporting those expansion plans.
Looking at the analysis, it doesn't take long to discover what is at the heart of the business community’s confidence. It is the availability and quality of the area workforce. The report notes that with employment at about 94 percent in each county, savvy business owners make informed choices, allowing for the continuation of strong employment standards.
In both counties nearly 80 percent of surveyed businesses rated the availability of the office workforce as good to excellent. In Kossuth County high ratings for availability of professionals is similar, while about 60 percent consider availability categories for managers, semi-skilled and unskilled workers to be good to excellent. Roughly half the participants rated the availability of skilled workers in the county as highly.
Palo Alto County surveys revealed the higher ratings were given for semi- and unskilled workforce availability more than 60 percent of the time while availability of professional, managerial and skilled workers were rated good to excellent half the time in that county.
Along with an available workforce comes a quality workforce, according to the report. In Kossuth County 70 percent of the surveys said the quality of the office workforce was good to excellent. High praise was also given for the professional and unskilled workforce, with about 60 percent of surveys stating these groups were good or excellent. Managers, skilled and semi-skilled groups were rated highly by about half the respondents.
Palo Alto survey participants said the quality of office, semi-skilled and unskilled workers in the county was good to excellent about 60 percent of the time. The quality of the skilled workforce was rated in the higher categories about half of the time in the county.
While the survey provides a look at how existing business views the local business climate, the economic impact analysis shows how certain segments of the business community impact the region in dollars and cents.
“This analysis was completed by University of Northern Iowa and provides insight into the impacts a particular industry has on the local economy,” Elbert explained. “Often times this is referred to as the 'multiplier effect' of dollars spent by the company and its employees.” The impact analysis includes workforce statistics, business operations, education and healthcare data, she added.
The Economic Impact analysis was conducted on several businesses in Kossuth and Palo Alto region utilizing the IMPLAN software model. The IMPLAN software addresses two common economic questions: First, how does the local economy function? And, second, what would the economic consequences of this project or action be?
"The multiplier effect of the presence of the largest six (non-ag/food) businesses results in an additional $28 million in economic activity,” said Cindy Angel, Research Manager, Institute of Decision Making at the University of Northern Iowa. “There are an additional 467 jobs in the area due to the multiplier effect of these businesses.”
The six businesses Angel is talking about are Aluma Ltd., Bancroft; Cozzini Material Handling Equipment, Algona; Energy Panel Structures, Graettinger; Pharmacists Mutual Insurance, Algona; Snap-On Tools, Algona; and Universal Manufacturing, Algona.
The impact of an industry group is broken into three categories: direct, indirect – industries interacting financially, and induced – changes in spending related to changes to the industry. This group has a total impact on the two -county region of $160 million. Direct effects are $132 million, indirect $18 million and induced effects of about $10 million.
Total employment tied to these firms is 1,306 jobs. Directly there are 839 jobs, indirectly there are 263 and another 204 jobs induced by these businesses.
Due to the heavy impact of agriculture and food processing-related businesses they were analyzed separately. AGP Cooperative, Emmetsburg; Country Maid, West Bend; Hormel Foods, Algona; and Kerber Milling Company, Emmetsburg have operations output of $298 million. The direct effect is $265 million; indirect effects are $28 million and $5 million more in induced effects. The multiplier effect of these four businesses accounts for an additional $33 million in the area.
Together the four impact employment to the tune of 1,534 jobs, 406 of them directly, 825 indirectly and another 303 are induced.
Additionally wholesale companies like MaxYield Cooperative, Pioneer Hi-Bred and Stateline Cooperative report sales nearing $400 million and employ about 200 workers.
Analysis includes the economic impact of education upon the area. Iowa Lakes Community College, with locations in Algona and Emmetsburg among others, has enrollment of about 3,500 students, employs 150 people in the two counties and has a payroll of $5 million. Kossuth and Palo Alto County K-12 schools claim 4,213 students and employ 907 people with a payroll of $24 million.
Healthcare has a significant economic impact as well. In Kossuth County the economic impact of the healthcare industry includes 807 jobs (1,198 counting the multiplier effect), payroll and proprietor income of $30 million ($40 million counting the multiplier effect). In Palo Alto County the healthcare segment is responsible for 1,275 jobs and $39 million in payroll and proprietor income including the multiplier effect.
Another significant player in the area economy is the Wild Rose Casino and Resort in Emmetsburg. The 17,000-square-foot casino and the attached 70-bed hotel have an economic impact on Iowa that totals $5.5 million according to its statement of economic impact on the state of Iowa.
Copies are available at the Kossuth/ Palo Alto Economic Development Corporation Office.
For more information contact:
Maureen Elbert, Executive Director
Kossuth/Palo Alto County Economic Development Corporation
106 S. Dodge St., Suite 210
Algona, Iowa 50511
Ph: (515) 295-7979 Fax: (515) 295-8873
www.kossuth-edc.com / www.paloaltoiowa.com