Forecasters see sustained growth in state’s economyFeb 4th, 2010 | By tfedderson2 | Category: Campus News, February 4, 2010, Issue
The Nebraska Business Forecast Council is providing an optimistic economic outlook for Nebraska over the next two years, and estimates broad-based growth in the state’s economy during that span.
Members of the 12-person Nebraska Business Forecast Council include John Austin, professor of economics; Bruce Johnson, professor of agricultural economics; and Eric Thompson, associate professor and director of the UNL-based Bureau of Business Research.
The council’s first economic projection in the new decade, published through UNL’s Bureau of Business Research, estimates that Nebraska will see solid job and income growth in 2010, and especially strong growth in 2011.
“As in recent years, economic conditions will be relatively strong in Nebraska, since the state begins the year in better shape (in comparison with the overall national economy),” the council reported in the bureau’s publication, Business In Nebraska. “Job growth will rebound … erasing most of the job losses that occurred in 2009.”
Projected rapid job growth in 2011 likely means that the state’s employment will reach pre-recession levels by the middle of that year, the council forecasts. Job growth will be broad-based, returning to most sectors – service industries, transportation and utilities and financial services – this year, and others such as retail trade, manufacturing and wholesale trade in 2011.
Nebraska’s unemployment rate is expected to stay at about half the national average and fall in step with national rates, the council estimates. Meanwhile, the council projects increases of 3.9 and 5 percent in non-farm personal incomes in 2010 and 2011.
Farm incomes, which in 2009 fell sharply from the previous year’s record highs, should grow 8.2 percent in 2010 and 3.4 percent in 2011, the council predicts. The dollar’s decline against other currencies, if it holds, will encourage more agricultural exports. The falling dollar, by increasing the price of oil, will also lift ethanol prices and subsequently help support corn prices.
Other segment-specific highlights of the report include:
• The services sector – 37 percent of Nebraska employment and made up of large industries such as health care, professional and scientific jobs, and arts, entertainment and recreation businesses – will see steady job growth as the economy recovers. Very rapid job growth is expected for professional, scientific and technical services, administrative and support services, and management of companies, especially in 2011. Overall service sector job growth will reach 2.2 percent in 2010 and 2.7 percent in 2011.
• A slow recovery is expected in the construction sector this year as the economy recovers, credit conditions slowly improve and demand for new housing leads to an improvement in new home construction. Road construction and other infrastructure projects likely will show modest growth, thanks to federal stimulus dollars. But non-residential construction will weaken in 2010, as a surplus of commercial buildings will limit new construction until 2011.
• Manufacturing is again expanding, but rising productivity suggests that employment growth will return slowly. Employment is forecast to decline through 2010 and show modest growth in 2011.
• The U.S. economy’s recovery means a recovery in the state’s transportation and utilities sector. Nebraska’s central location, the advantages of the Interstate 80 corridor and low entry costs point to above-average employment growth in the industry – 1.3 percent this year, accelerating to 3.6 percent next year.
• The information industry, which includes newspapers, media outlets, sound studios, telecommunications, data processing and Web site development, will likely see declines in 2010 and flat employment in 2011.
Members of the Nebraska Business Forecast Council include John Austin, Department of Economics, UNL; Chris Decker, Department of Economics, UNO; 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; Bill Lock, Nebraska Legislative Council; Shannon Ramaeker, 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).
Access the complete report at http://bbr.unl.edu/.