An index tracking the economic outlook of Iowa’s largest employers dropped dramatically, a new survey released today shows. Iowa businesses blamed the impact of a national recession.

The Iowa Business Council’s overall index fell to 43.3 for the fourth quarter, a drop of 20 points from the index’s 63.3 in the third quarter. The index for the fourth quarter 2007 was 66.3.

The council, a group of the state’s largest employers, says a score above 50 represents positive business sentiment; below 50, negative sentiment.

Nineteen employers completed the survey used to compile the index, the council said. The index takes the pulse of council members’ expectations for sales, capital expenditures and employment for the next six months. The report shows:

Sales: The sales index fell to 51, remaining in positive territory, but significantly below the third quarter’s 63. A year ago, the overall sales index was 68.

Capital spending: The index fell to 41 in the fourth quarter from 65 in the third quarter. A year ago, the index was 71.

Employment: The fourth-quarter index fell to 38 from 62 in the third quarter. A year ago, the index was 60.

“Through the third quarter of 2008, Iowa’s well-managed companies and productive workforce have, in most instances, been able to sufficiently navigate the turbulent national and world markets,” said Max Phillips, chairman of the council and president of Qwest-Iowa & South Dakota.

“However, as many of the products and services produced in Iowa are exported across state lines and international borders, the effects of a sustained global economic downturn are beginning to be reflected” in the index survey taken by Iowa business executives.

Phillips said the council is hopeful the second half of 2009 will bring “a stabilization of negative trends and mark the beginning of a strong rebound for sales, capital investment and employment in Iowa.”