State economic forecasters expect steady economic and job growth for most of Nebraska’s industries throughout 2015. But in a new report, they also predict Nebraska farm incomes will continue to decline from the record levels of 2011.
This latest long-range report from the Nebraska Business Forecast Council was published this morning (July 12) by the University of Nebraska-Lincoln’s Bureau of Business Research. Some highlights of the report:
Total job growth is predicted to be 1.3 percent by the end of 2013, and then rise to 1.5 percent in 2014 and 1.6 percent in 2015.
Farm incomes are forecast to drop to $5.2 billion in 2013 (a 3.7 percent decline from 2012), then to $5 billion in 2014 (a further 3.8 percent decline) and remain at $5 billion in 2015. The gradual dissipation of drought across the Corn Belt has led to suggestions corn prices will fall substantially by harvest, which could mean a $1.5 to $2 billion reduction in net earnings for Nebraska corn producers, a drop that will last into future years. “A rebalanced Nebraska agriculture sector would maintain farm income near $5 billion per year,” according to Eric Thompson, an economist and director of the UNL Bureau of Business Research. “This amount is effectively the ‘new normal’ for Nebraska agriculture.”
SERVICE SECTOR JOBS
The services sector, which is 38 percent of Nebraska’s employment and includes health care, professional and scientific jobs, plus arts, recreation and entertainment, will continue broad growth through 2015. This sector of the state economy will grow 2 percent this year, 2.3 percent in 2014 and 2.5 percent in 2015, which translates into 7,600 to 9,300 jobs per year.
Nebraska continues to benefit from a housing recovery; building permits and housing starts should continue climbing over the next two years. Forecasters expect construction jobs to swell by 3.5 percent (about 1,500 jobs) in 2013, and by 4 percent (another 1,800 jobs) in both 2014 and 2015.
FOOD PROCESSING INDUSTRY
The state’s food processing industry will see steady growth via demand from and investment by foreign markets. Manufacturing industries that sell primarily to the region’s farm sector are likely to see some drop in sales as farm incomes return to more normal levels. Overall, the state will benefit from increased foreign demand for food products and strong growth in the energy sector.
To read the full Business in Nebraska report, go to: http://www.bbr.unl.edu/