College of Business Administration
Nebraska Economic Outlook and Issues
Presented at
Nebraska’s Economic Outlook: A Business Summit
Trends and Challenges Facing Nebraska
December 3, 2014
Eric Thompson
Director, Bureau of Business Research
College of Business Administration
University of Nebraska-Lincoln
ethompson2@unl.edu
www.bbr.unl.edu
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College of Business Administration
Outline
Nebraska Economic Outlook
The next 6 months
The next 2 years
How to Ignite Faster Growth In Nebraska?
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College of Business Administration
Economic Outlook Next 6 Months
Leading Economic Indicator – Nebraska from the UNL Bureau of Business Research
Six components:
Business expectations
Value of U.S. dollar
Single-family home building permits
Airline passenger counts
Initial claims for unemployment insurance
Manufacturing hours
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College of Business Administration
Economic Outlook Next 6 Months
Leading Economic Indicator - Nebraska
Figure 2: Change in LEI - N
Last 6 Months
2.44%
1.22%
1.55%
0.69%
0.92%
0.04%
0.00%
-0.55%
-1.22%
-0.10%
-2.44%
May 14
Jun 14
Jul 14
Aug 14
Sep 14
Oct 14
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College of Business Administration
Economic Outlook Next 6 Months
Leading Economic Indicator - Nebraska
Figure 7: 6-Month Forecast of
Coincident Economic Indicator - Nebraska
1.25%
111.00
0.65%
0.41%
0.75%
0.25%
0.23%
0.25%
-0.25%
-0.09%
-0.75%
110.00
109.00
-0.13%
-1.25%
108.00
Oct 14
Nov 14
Dec 14
Jan 15
Index Growth
Feb 15
Mar 15
Apr 15
Index Value
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College of Business Administration
Economic Outlook Next 2 Years
Nebraska Business Forecast Council
Moderate job growth outlook in most key industries yields
moderate income and population growth in Nebraska in
2015 and 2016
Strong growth: construction
Moderate growth: services, transportation
Modest growth: retail, manufacturing
Limited growth: agriculture (but a bright future)
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College of Business Administration
Economic Outlook Next 2 Years
Longer-Run Forecast for Construction (2% - 2.5%)
55
45
40
35
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
30
2000
1000s of Jobs
50
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College of Business Administration
Economic Outlook Next 2 Years
Longer-Run Forecast for Services (1.5% - 1.8%)
420
400
360
340
320
300
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
280
2000
1000s of Jobs
380
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College of Business Administration
Economic Outlook Next 2 Years
Longer-Run Forecast for Manufacturing (0.3% - 0.7%)
120
115
105
100
95
90
85
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
80
2000
1000s of Jobs
110
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College of Business Administration
Economic Outlook Next 2 Years
Longer-run forecast for total non-farm jobs
2.0%
1.8%
1.5%
1.5%
1.4%
1.2%
1.0%
1.0%
1.0%
0.5%
0.0%
2014
2015
United States
2016
Nebraska
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College of Business Administration
Economic Outlook Next 2 Years
Longer-Run Forecast for Income and Population
Measure
Rate of Growth
2015
2016
Non-Farm Personal Income
4.3%
4.4%
Farm Income
-3.1%
-1.3%
Population
0.6%
0.6%
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College of Business Administration
How To Ignite Faster Growth in Nebraska?
Effective Tax Modernization
Pro-Growth Regulations
Reduce barriers to housing development
Reduce barriers to livestock industry and develop
more efficient water policy
Address Skills Gap and Labor Supply Issues
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College of Business Administration
How to Address The Skills Gap and Labor Supply
How do we encourage people to work more
and upgrade their skills?
Reduce tax burden on working class households
Address disincentives from the “Safety Net”
Provide more opportunities training and education
Address workers with “poor” work histories
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College of Business Administration
THANK YOU
Any Questions?
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