Jun. 2--DES MOINES -- The three primary statistics Iowa's major employers use to gauge their economic activity for the next six months moved up in the second fiscal quarter, the Iowa Business Council reported Monday.

The council's economic Outlook Survey Index edged up to 38.3 -- three points higher than the first-quarter showing of 35.3.

It was an improvement, but reading the numbers demands some context, said Elliott Smith, the council's executive director.

"It's positive in that the numbers have moved higher, and we're off the lows we've seen the last few quarters," Smith said. "But it's important to note that it's a 100-point scale. Numbers above 50 are positive and below 50 are negative, so you want to include some caution in the optimism and hope that these numbers are the beginning of a trend which would be more evident next quarter."

The survey saw improvements in the Sales, Capital Spending and Employment categories.

The second-quarter sales index of 44 is six points higher than last quarter and 27 points lower than the second-quarter survey in 2008. Sixty percent of the CEOs predict steady or increased business activity over the next six months -- substantially higher, 5 percent; higher, 20 percent; or no change, 35 percent. However, 40 percent of the survey respondents expect sales levels to decrease -- lower, 25 percent; or substantially lower,15 percent.

The Capital Spending OSI is 33, up two points from last quarter but 33 points lower than one year ago. Thirty-five percent of respondents expect capital spending levels to be substantially higher, 5 percent; higher, 5 percent; or remain the same, 25 percent; through November 2009. Most respondents (65 percent) expect capital spending -- investments in facilities and equipment -- to be lower, 45 percent; or substantially lower, 20 percent.

The Employment index is 38, one point higher than three months ago but 18 points lower than last year. Fifty percent of corporate members said hiring needs likely would be higher, 10 percent; or the same, 40 percent; for the next six months, while the other half expect lower, 40 percent,. Ten per cent expect substantially lower employment levels.

"Today's survey results present the first hopeful sign that the negative trends we have witnessed lately in Iowa's business environment may be moderating," Mel Haught, the council's chairman and president and CEO of Pella Corp., said in a news release.

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