Bureau of Business Research releases fall 2004 economic outlook

Nebraskans can expect moderate growth in the state's economy over the next three years, according to a forecast by the Nebraska Business Forecast Council and the Bureau of Business Research at the University of Nebraska-Lincoln College of Business Administration.

Reporting in the fall issue of Business in Nebraska, the bureau and the council were optimistic about the outlook for growth next year, as well as in 2006 and 2007. Their forecast said Nebraska's economy, like the national economy, will benefit from strong demand from households and businesses. However, as with the national economy, high energy prices and rising interest rates will keep growth rates moderate (rather than rapid).

The expected growth over the next three years follows a year of overall steady growth in 2004, with both employment and income growing moderately.

The outlook report said the overall rate of job growth is expected to be lower during the next few years than in the 1990s due to slower growth in the supply of labor and rising costs for providing employee benefits such as health care. Annual job growth is expected to be 1.5 to 1.7 percent per year during the 2005-2007 period. Job growth is expected to be rapid in the health care, construction, trucking, and finance and insurance industries and slow in the manufacturing and retail industries.

Non-farm income growth is forecast to reach 4.7 to 4.8 percent per year during the forecast period. Income from employee benefits is expected to be the fastest growing component of non-farm income.

Recent increases in farm income are expected to be sustained with farm income above $3.5 billion a year over the three-year period.

The economic outlook report contains forecasts for employment, income, and taxable sales for 2005 through 2007 and the full report can be found online in Adobe Acrobat PDF format at www.bbr.unl.edu/FallBin.pdf. Business in Nebraska is a quarterly publication of the Bureau of Business Research. The Nebraska Business Forecast Council is composed of economists from government and higher education. The next economic outlook report will be available in May 2005.

CONTACT: Eric Thompson, Director, Bureau of Business Research (402) 472-3318