Report shows hit to Nebraska's economy; author predicts full recovery will take until next year

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April 29, 2020 - 1:22pm

 

A new report suggests how sharply Nebraska’s economy has declined during the COVID-19 pandemic, and its author predicts the state won’t fully recover until next year.


The report from the University of Nebraska-Lincoln’s Bureau of Business Research reflects the spike in claims for unemployment insurance and a drop in airline passengers, along with declines in home building permits and manufacturing hours. Overall, it shows Nebraska’s leading economic indicators fell nearly 8 percent in March, compared to February.

“This is not a surprising result, but it does show the magnitude of the drop. And obviously its predicting some of the declines that have been occurring in April, and that we’re anticipating at least in the first part of May,” said Eric Thompson, director of the Bureau of Business Research.

With business restrictions about to be relaxed in parts of the state, Thompson said the economy should pick up.

“I do think that the Nebraska economy will begin its recovery in the month of May. So we’ve had a sharp drop in the last month and a half or two months. And the question is, you know, how rapidly will it recover?” he said.

Thompson says it will take a while.

“So the leading indicator…and other information suggests that the economy will recover, but we’re not likely to fully bounce back by the fall of this year,” he said.

And although he’s expecting a strong recovery, Thompson said there will be some big obstacles to overcome.

“It’s been such a severe drop that even though the recovery will be strong, to get all the way back to where we started, given all the dislocation that’s occurred – there are going to be some businesses that don’t survive this, people will have to find new employment – it’ll take into 2021 to fully recover,” he said.

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