Des Moines: Economy
Major Industries and Commercial Activity
The Des Moines economy consists of a balance among the manufacturing, services, government, wholesale and retail trade, medical, insurance and financial services, printing, publishing, and agribusiness sectors. Manufacturing, while comprising a relatively small percentage of the city's total employment base, has a significant impact on the area economy. Manufacturing firms buy many of their supplies locally, generating more secondary jobs than any other industry. In addition, most of the goods produced are shipped outside the metropolitan area, and approximately 10 percent of manufacturing production is exported, thus contributing to the development of the local shipping industry. Some of the area's best-known manufacturers are Pella windows, Maytag and Amana appliances, and Rockwell Collins avionics equipment.
With the headquarters of nearly 70 insurance companies and the regional offices of 100 other firms located in the metropolitan area, Des Moines is a major insurance center. Other service businesses, including the health care industry, employ nearly one fourth of the work force. Many area firms are active in biotechnology, conducting research in such fields as human, plant, and animal disease cures; safer pesticides and herbicides; and new, higher crop yields.
A statewide employer based in Des Moines is Meredith Corporation, a diversified communications company specializing in printing, publishing, broadcasting, and real estate. An emerging industry in the Greater Des Moines area is fiber optics telecommunications, which is expected to replace conventional communications systems. Government employs a substantial portion of the city's work force, with the state of Iowa being among the largest employers.
Items and goods produced: flour, cosmetics, furnaces, stove and furnace parts, agricultural implements, automotive and creamery equipment, leather products, medicine, brick, food items, paint, electric switches, and elevators
Incentive Programs—New and Existing Businesses
The Greater Des Moines Partnership assists firms with an interest in applying for economic development financial assistance programs. Other public and private sector groups offer a variety of business assistance programs to businesses expanding in or relocating to Des Moines.
A corporation intending to create 100 jobs may be eligible to receive a $400,000 low-interest or forgivable loan to help reduce its relocation cost. The City of Des Moines Office of Economic Development assists businesses in a variety of ways, including project management; identification of land, financing and other resources to facilitate projects; liaison with other city departments; referrals for business licenses; job training and recruitment; and redevelopment assistance. Qualifying Des Moines businesses are able to take advantage of several helpful tax policies, including single factor corporate income tax; tax abatement for new construction; and no property tax on machinery and equipment. Several small business loan programs and funds are available to assist qualifying small businesses in building improvements, equipment purchases, and operating costs.
Two areas within the City of Des Moines are designated as Iowa Enterprise Zones. New commercial and industrial businesses making a capital investment of at least $500,000 and creating 10 new jobs meeting wage and benefit targets within these designated areas may be eligible for a package of tax credits and exemptions. The State of Iowa New Jobs and Income Program provides a package of tax credits and exemptions to businesses making a capital investment of at least $10 million and creating 50 new production jobs meeting wage and benefit targets. The Iowa New Jobs Training Program offers funds for screening and assessment; travel for the purpose of training; on-the-job training; training facilities or supplies costs; and others. Qualifying businesses utilizing the Iowa New Jobs Training Program may take advantage of the New Jobs Tax Credit of $1,224 per new employee. Iowa's Regulatory Assistance Program offers assistance to businesses in filling out permit applications for Iowa regulatory agencies.
Job training programs
Des Moines Area Community College (DMACC) has provides a variety of business training programs. A portion of the training dollars may be used for salary reimbursement.
Approximately $1.5 billion in construction projects were completed or underway in 2004 and into 2005, marking a renaissance for Des Moines. Among those projects were the new Science Center of Iowa, featuring an IMAX theater; a new riverfront amphiteater; the new downtown library; and the Jordan Creek shopping complex in West Des Moines.
Construction at the Iowa Events Center, a four-venue multiuse complex, has city planners expecting record numbers of both conventions and convention attendees. The new HyVee Hall opened in winter 2004 at the complex, featuring 250,000 square feet of exhibit space 14,000 square feet of meeting room space, and another 23,700 square feet of pre-function space. Hy-Vee also contains the Iowa Hall of Pride, an interactive center that honors the people and places of Iowa's history. The Wells Fargo Arena at the complex is slated for debut in July 2005. The new arena will seat 17,000 for sports and entertainment events and will be home to the Iowa Stars hockey organization.
Economic Development Information: Greater Des Moines Partnership, 700 Locust Street, Suite 100, Des Moines, IA 50309; telephone (515)286-4950; email email@example.com. City of Des Moines, Office of Economic Development, 400 E. First Street, Des Moines, IA 50309; telephone (515)283-4004; email firstname.lastname@example.org
Des Moines is served by four major railroads that provide full-time switching and piggyback ramp service. A host of motor freight carriers provide overnight and one–to five–day shipping to points throughout the United States; more than 50 terminals are maintained in the community. The Des Moines airport serves as a regional hub for UPS' second-day air service. Approximately 100 companies in the Des Moines area engage in export or import activity.
Labor Force and Employment Outlook
Local analysts contend that the best measurement of the quality of the work force is the site location decisions made by businesses. They say the greatest testimony to the quality of the Des Moines work force is that once a company locates in Des Moines, it continues to expand. Beyond a higher-quality work force, a low crime rate, short commute times in metro Des Moines, affordable housing, a broad array of education options, and attractive quality of life help local businesses recruit employees.
The major employment industries in Des Moines are financial services, insurance, government, manufacturing, trade, and services. Des Moines businesses draw employees from a five-county area consisting of more than 500,000 residents; in addition, Iowa's work force, with an 80 percent high school graduation rate, ranks among the top five states. Wages are somewhat lower than the national average in Des Moines. Vocational and technical skills training programs are widely available.
The following is a summary of data regarding the Des Moines metropolitan area labor force, 2004 annual average:
Size of nonagricultural labor force: 298,900
Number of workers employed in . . .
construction and mining: 16,900
trade, transportation and utilities: 64,100
financial activities: 46,800
professional and business services: 30,700
educational and health services: 34,700
leisure and hospitality: 26,500
other services: 12,100
Average hourly earnings of production workers employed in manufacturing: $17.47
Unemployment rate: 5.1% (March 2005)
Cost of Living
Des Moines is often ranked in the top metro areas for housing affordability and a favorable cost of living. State and local taxes are lower than the U.S. average.
The following is a summary of data regarding several key cost of living factors in the Des Moines area.
2004 (3rd Quarter) ACCRA Average House Price: $266,690
2004 (3rd Quarter) ACCRA Cost of Living Index: 94.9 (U.S. average = 100.0)
State income tax rate: Ranges from 0.36% to 8.98%
State sales tax rate: 5.0% (2005)
Local income tax rate: None
Local sales tax rate: None
Property tax rate: $17.04857 per 1,000 of assessed valuation (2005)
Economic Information: Greater Des Moines Partnership, 700 Locust Street, Suite 100, Des Moines, IA 50309; telephone (515)286-4950; email email@example.com
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