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An economist who tracks regional business trends says the hit from the coronavirus pandemic to Nebraska and the region’s economy isn’t as bad as expected so far, but things will get worse before they get better.
Creighton University economist Ernie Goss said the survey of business conditions in a nine-state region shows after three straight months of growth, business began to shrink in March.
“The number was down below growth-neutral, but not nearly as low as I expected,” Goss said.
The number Goss was referring to was the Business Conditions Index, which declined from 52.8 in February to 46.7 in March. "Growth neutral" is 50.
Goss said retail business were hit harder by the impact of COVID-19 than manufacturing. Looking ahead, he says, business confidence is the lowest the survey has shown in the 26 years the survey has been conducted, including two recessions and 9-11.
“This is well below what we experienced there. So what this indicates is the negative impacts that we experienced or recorded for the month of March. They're going to increase for April and probably May as well, so we'll have to wait and see what happens for those forward months, but I do expect them to be even weaker,” he said.
Goss said the economy could experience a "u-shaped" recession, with a sharp decline followed by a protracted slog along the bottom before turning upwards again as stimulus money and warmer weather comes into play. But he said the biggest improvement doesn’t depend on economics.
“We need a vaccine more than we need a rescue package. We need a vaccine more than we need right cuts by the Federal Reserve,” he said.
Health experts say that vaccine could be 12-18 months away.
Correction: An earlier version of this story, and the audio version, misdescribed a "u shaped" recession.