Category

Strengths (S)

Weaknesses (W)

Opportunities (O)

Threats (T)

Ease of Doing Business

Competitive Tax Climate: Ranked 20th in 2025 for overall state tax competitiveness, indicating a favorable environment.

Workforce Shortages: Ongoing challenge in attracting and retaining talent, particularly skilled labor for manufacturing.

Targeted Investment Programs: Initiatives like the Major Economic Growth Attraction (MEGA) Program to attract large-scale projects in advanced manufacturing and biosciences.

National Business Climate: Federal regulations, supply chain instability, and infrastructure issues cited by businesses as top challenges.

Domestic Manufacturing

Economic Powerhouse: Contributes approximately 17% (or $$$35 billion) to Iowa's GDP, driven by agricultural machinery, food products, and chemicals.

Reliance on Ag Economy: Sector is highly sensitive to the lagging agricultural economy (e.g., lower crop prices), which affects machinery demand.

Manufacturing 4.0 Initiative: State grant program to help manufacturers adopt advanced technologies (e.g., AI, automation) to remain competitive and improve efficiency.

Tariff Volatility: Rising input costs (e.g., steel) and uncertainty from frequently shifting federal tariff policies, which disrupt long-term planning.

Sustainability Initiatives

Major Renewable Energy Growth: Approved the largest solar proposal in state history (800 MW) and actively promotes renewable energy adoption.

Water Quality & Pollution: Persistent environmental challenges like elevated nitrate concentrations in water and inadequate handling of pollution from industrial events (e.g., fish kills).

Agri-Sustainability Integration: Growth in projects like anaerobic digester development (waste-to-biogas) and successful legal defense of agricultural wetlands protections.

Policy Setbacks: Federal/EPA actions (e.g., rescission of impaired waters disapproval) that are viewed by environmental groups as undermining local clean water efforts.

Balance of Trade

Trade Surplus: Consistently maintains a positive trade balance (e.g., a $$$340 million surplus in July 2025), indicating the state exports more than it imports.

Dependence on Key Goods: Exports are concentrated in a few volatile commodity and equipment sectors (pork, corn, soybeans, tractors).

Diversification of Export Markets: Continued strong momentum in non-China markets for protein and grains (e.g., South Korea, Mexico, Colombia).

Global Tariffs & Retaliation: Soybean and pork exports are highly vulnerable to retaliatory tariffs, particularly from China, forcing market adjustments.