A couple of stories late last month combined for some great news on the economic-stability front here in the Cedar Valley.
In every community across the nation, the unemployment rate is one of the most important indicators of economic health. According to figures compiled by Iowa Workforce Development, unemployment in the Cedar Valley has reached its lowest point in nearly 17 years.
The Waterloo-Cedar Falls metropolitan statistical area, which includes Black Hawk, Bremer and Grundy counties, recorded a 2.6 percent jobless rate for October. The last time the rate was that low was in November 2000.
It’s also below the state rate of 3 percent. Meanwhile, Black Hawk County checked in with a rate of 2.8 percent after recording a 4.1 percent unemployment rate one year ago.
Also as November turned to December, it was reported Deere & Co. posted its third consecutive quarter of earnings increases and the fifth-best year for sales and earnings in the company’s 180-year history.
For fiscal year 2017, the company posted earnings of $2.159 billion, or $6.68 per share, compared with $1.524 billion, or $4.81 per share in 2016. That’s an increase of nearly 42 percent.
Just a year ago, the company had seen 11 consecutive quarters of earnings declines, and year-end earnings were the lowest in seven years. Those declines, however, came right after several consecutive years of record earnings.
Anyone who has lived in this area for a substantial amount of time knows Deere has been an economic anchor and major employer in the Cedar Valley for a century. Like any corporation, it is subject to the nuances of the marketplace.
Right now, Deere is projecting its ag and turf equipment sales will increase 9 percent worldwide for fiscal year 2018, with ag equipment sales in the U.S. and Canada up 5 to 10 percent for the year.
“What you’re seeing right now is replacement of equipment, especially large equipment,” said Deere spokesman Ken Golden. That includes the large row-crop tractors made in Waterloo.
“Were experiencing low commodity prices and yet we’re seeing sales for the year being the fifth-highest in company history,” he added. “Entering into this year, we were projecting to be down 1 percent in equipment sales and we’re up 11 percent. We’re definitely seeing improvement in farm and construction.”
Golden said the company’s early orders for large tractors heading into 2018 look promising.
“That’s a big thing for places like Waterloo that build large equipment,” he said.
It also supports the company’s projection of an even better performance in 2018, with projected earnings of $2.6 billion.
Of course, it wasn’t too long ago when hundreds of Deere workers here experienced layoffs. As of the first week of November, Golden said less than two dozen employees in the Deere Waterloo Works were on layoff. That compares with nearly 1,000 workers who experienced layoffs in late 2014 and early 2015.
For a corporate giant like Deere, long-term vision is of utmost importance, managing the company so the good times keep rolling years down the road.
Overall, Deere has been on a pretty good run the past couple of decades.
Prior to 2014, and since the last major Deere workforce reduction in the late 1990s, the company had invested more than $1 billion in its Waterloo operations and saw a 36 percent increase in employment.
The company has consistently bounced back from down times with long runs of record earnings.
While the Cedar Valley has greatly diversified its workforce over the years, Deere is still a large economic and employment anchor.
“It’s a great market, but it’s also the business plan, which is to grow geographically in product lines and control costs,” Golden said. “That adds up over time to a profitable company that benefits our employees. If we can run the company well, expand well, all employees benefit.”
And that means the Cedar Valley — and other communities with a large Deere presence -- also benefit..