Nebraska Economy Forecast to Grow
The Nebraska economy appears poised for growth over the next three years according to the latest forecasts by the UNL Bureau of Business Research (BBR) and the Nebraska Business Forecast Council (Table 1). The growth will help offset losses incurred last year due to COVID-19 when Nebraska employment dropped 3.7 percent, roughly 37,600 jobs.
The most severe job losses were in the leisure and hospitality sectors and state and local governments, but the retail trade and manufacturing industries were not immune. On the other hand, jobs in construction grew by 1,100 due to low interest rates, new housing construction, and home renovation and repair projects. Employment numbers are expected to return to pre-pandemic levels in 2022.
Other nuggets from the BBR and Nebraska Business Forecast Council forecasts include:
- Farm income is estimated to have risen 37 percent last year compared to 2019. Ag producers benefited from stimulus payments and lingering trade assistance, but the sharp improvement in commodity prices in the later part of the year also contributed to income gains.
- Farm income is forecast to rise another 1.1 percent in 2021 before falling back 13.7 percent in 2022 and 1.4 percent in 2023. The uncertainty of market prospects, supply responses, and changing agricultural policy support complicate the projections.
- The food processing sector weathered the COVID-19 pandemic better than the durable goods manufacturing sector because of the continued demand for necessities. Food processing lost 200 jobs last year versus 2,000 jobs lost by the state’s durable goods manufacturers. Growing productivity in the crop and livestock sectors is expected to fuel supply growth and keep Nebraska an attractive location for new food processors.
- Nonfarm income grew in 2020 despite the pandemic due to stimulus checks, unemployment benefits, and other government transfer payments. Nonfarm income is expected to grow 3.7 percent in 2021, 0.6 percent in 2022, and 3.2 percent in 2023.
- The highest percentage job growth over the next three years is expected to occur in the construction, non-durable goods manufacturing, financial, and services sectors.
Table 1. Key Nebraska Economic Growth Rates