While the nation's economy faces prospects of tepid growth and a stubborn unemployment rate, Nebraska's economy should be relatively strong and see steady growth over the next two and a half years, forecasters said.
In its latest report, the Nebraska Business Forecast Council maintained its economic outlook for the state through 2012, though its latest job outlook is slightly less optimistic than its previous forecast in January.
Still, the council expects 2009's sharp job losses to be shored up by moderate employment and income growth through the rest of this year, and then followed by continual growth in 2011 and 2012.
"Nebraska continues to have a favorable industry mix, with strength in agriculture and insurance," the council noted in the report, which is published through UNL's Bureau of Business Research. "Nebraska consumers also face fewer problems from unemployment and falling home prices."
Job growth in the state should continue through 2010 and will be broad-based - it should reach pre-recession levels by late 2011, the council forecasts. In January, the council forecast statewide job growth of 0.9 percent by the end of 2010; the revised forecast is 0.3 percent growth, partly because final 2009 employment figures showed heavier job losses than originally thought.
Meanwhile, the council is projecting jumps of 2.7 and 3.8 percent in Nebraska's non-farm personal incomes in 2010 and 2011. Incomes should also climb another 3.8 percent in 2012.
Farm incomes, which have seen big swings in recent years, should begin to stabilize in the next few years, the council estimates. The global economic recovery, especially in Asia, should help agricultural exports, but financial contagion in Europe also means an appreciation in the U.S. dollar, which in turn hurts ag exports.
As a result, statewide farm incomes are now forecast to grow by 11.9 percent by the end of 2010. By 2011, they should grow by a more modest 3.3 percent, and 1.6 percent in 2012.
Other segment-specific forecasts in the latest report:
- The services sector, which makes up 37 percent of Nebraska employment and includes large industries like health care, professional and scientific jobs, and arts, recreation and entertainment businesses, will see 1 percent growth in 2010 for a gain of about 3,500 jobs. Growth will gather speed in 2011 and 2012, thanks to progress in business services and hospitality areas and continued strength in Nebraska's health care industry.
- Continued growth in Nebraska's manufacturing activity, which is largely shaped by the state's agricultural sector, has begun to generate new employment in the state. Manufacturing of durable goods should rise in 2011 and 2012, recovering about half of the 6,600 jobs lost in that area in 2009.
- Financial services - a segment that includes finance, insurance and real estate - will recover more slowly, most likely in 2011. Employment growth is expected to dip by 0.8 percent in 2010, grow by just 0.2 percent next year and recover to 1 percent growth by 2012.
- Nebraska's information industry, which includes newspapers, media outlets, sound studios and technology-oriented industries, will see a 3.8 percent employment decline in 2010. Employment will be flat in 2011, but should grow by about 200 jobs, or 1 percent, in 2012.
Members of the Nebraska Business Forecast Council were John Austin, Department of Economics, UNL; Chris Decker, Department of Economics, University of Nebraska at Omaha; Tom Doering, Nebraska Department of Economic Development; Ernie Goss, Department of Economics, Creighton University; Bruce Johnson, Department of Agricultural Economics, UNL; Ken Lemke, Nebraska Public Power District; Phil Baker, Nebraska Department of Labor; Franz Schwarz, Nebraska Department of Revenue; Scott Strain, Greater Omaha Chamber of Commerce; Eric Thompson, Bureau of Business Research, UNL; and Keith Turner, Department of Economics, UNO (emeritus).
- Steve Smith, University Communications
More details at: http://go.unl.edu/s5c