2012 Economic Conditions in Nebraska:
What do the Indicators Say?
AUGUST 21, 2012
BOARD OF DIRECTORS
NEBRASKA INDEPENDENT COMMUNITY BANKERS
GRAND ISLAND, NEBRASKA
ERIC THOMPSON, DIRECTOR
UNL BUREAU OF BUSINESS RESEARCH &
NEBRASKA BUSINESS FORECAST COUNCIL
WWW.BBR.UNL.EDU
ETHOMPSON2@UNL.EDU
Outline
2
 Economic Outlook for 2012
 National/Global Trends
 2012 Annual Outlook from Nebraska Business Forecast
Council
 Leading Economic Indicator Nebraska
 Drought, Agriculture and the Nebraska Economy
UNL Bureau of Business Research
About the UNL Bureau of Business Research
Mission Statement
3
 Part of the Department of Economics within the
College of Business Administration
 Mission is to:

Conduct research on the state, Midwest, and national
economies
Newsletters
 Research Reports
 Journal Articles


Provide research opportunities to faculty, graduate students,
and undergraduate students
UNL Bureau of Business Research
About the UNL Bureau of Business Research
Student Research Assistants
 Students Employed During
2010-11 School Year:

Undergraduate
Zach Bishop
 Heath Miller
 Michael Pham
 Jiajia Xu


MBA Students
4

Economics Graduate
Students
Salfo Bikenga
 Martin Konou
 Wen Lian
 Jared McEntaffer
 Van Tran
 Ziwen Zhang

Adam George
 Nick Johnstone
 Shannon McClure
 Mihdi Vahedi

UNL Bureau of Business Research
About the UNL Bureau of Business Research
Outcomes
5
 The UNL Bureau of Business Research

Fulfills the research and teaching mission of the University of
Nebraska-Lincoln

While providing economic information about the Nebraska,
Midwest and National economy
UNL Bureau of Business Research
Macroeconomic Outlook
6
 Nationwide, a slow economic recovery is likely to
continue, and could accelerate in the 2nd half of 2012

But, there is an unusually high-risk of double-dip recession
 Positive developments:
 Housing beginning to improve
 Potential consumer spending rebound underway in the 2nd half
 China stimulus; beginnings of a plan for stabilization in
Europe
 Negative developments:
 Fiscal cliff
 Rising energy prices
UNL Bureau of Business Research
Macroeconomic Outlook
7
 Between 2008 and 2010, the performance of the
Nebraska economy was much better than the
performance of the national economy

This left Nebraska with a much healthier economy.
 The rate of growth in Nebraska was a bit slower in
2011.
 Further, in 2012, the Nebraska economy is expected
to again grow a bit more slowly than the national
economy.
UNL Bureau of Business Research
Nebraska Forecast for 2012 (and 2013)
Nebraska Business Forecast Council
8
Measure
Non-Farm Employment
Manufacturing
Transportation
Services
Nonfarm Income (nominal)
Taxable Sales
Inflation
Population
2012
1.0%
0.8%
0.0%
1.9%
3.5%
4.4%
1.5%
0.8%
UNL Bureau of Business Research
2013
1.4%
0.8%
2.2%
2.3%
3.0%
4.0%
2.0%
0.8%
Job Growth to Date in Nebraska
Month over Month
9
Month
Jan 11’ to Jan 12’
Feb 11’ to Feb 12’
Mar 11’ to Mar 12’
Apr 11’ to Apr 12’
May 11’ to May 12’
June 11’ to June 12’
July 11’ to July 12’
Growth
0.3%
0.0%
0.5%
0.6%
1.1%
1.5%
1.8% (preliminary)
UNL Bureau of Business Research
Strong-Term Forecast for Nebraska Economy
Leading Economic Indicator
Nebraska
10
 Short-term forecast from Leading Economic
Indicator-Nebraska, 6 components






Number of Single-Family Home Building Permits
Value of the U.S. dollar
Manufacturing Hours
Initial Unemployment Claims
Airline Passenger Counts
Business Expectations for Sales and Employment (Survey of
Nebraska Business)
UNL Bureau of Business Research
Predictive Power of
Leading Economic 11Indicator-Nebraska
UNL Bureau of Business Research
Leading Economic Indicator-Nebraska
1.24% Increase During July 2012
12
UNL Bureau of Business Research
Leading Economic Indicator-Nebraska
Change By Indicator Component
13
UNL Bureau of Business Research
Recent Values of
Leading Economic Indicator-Nebraska
14
UNL Bureau of Business Research
6-Month Forecast from Leading Economic
Indictor-Nebraska
15
UNL Bureau of Business Research
Drought, Agriculture and the Nebraska Economy –
Report by Bruce Johnson,16Eric Thompson, Anil Giri
UNL Bureau of Business Research
Drought, Agriculture and the Nebraska Economy –
Report by Bruce Johnson,17Eric Thompson, Anil Giri
UNL Bureau of Business Research
Drought, Agriculture and the Nebraska Economy –
Report by Bruce Johnson,18Eric Thompson, Anil Giri
Industry
Crops
Livestock
Agriculture-Related
Manufacturing
Transportation,
Equipment and Coops
Agricultural Research
and Education
Agri-Tourism
Total
Gross State Product
(Value-added)
(Millions $)
Direct
Total
Direct
Total
$3,567
$1,556
$7,311
$3,257
36,343
22,149
95,285
41,091
$4,052
$8,722
40,832
107,801
$1,771
$2,905
19,729
37,730
$243
$346
2,647
4,332
$58
$11,247
Employment
$95
2,415
3,004
$22,637 124,117 289,244
UNL Bureau of Business Research
Drought, Agriculture and the Nebraska Economy –
Report by Bruce Johnson,19Eric Thompson, Anil Giri
Nebraska agriculture has large spillover impacts on the
Nebraska economy outside of crop and livestock production
Based on August 1 conditions…..
Corn crop production is 13% below last year.
Soybean crop is 17% below last year.
Alfalfa hay is 27% below last year.
Livestock herds are being reduced
Some of the associated manufacturing and transportation
jobs will be lost in 2012 (and 2013)
UNL Bureau of Business Research