Farm Income Still Lagging, But Solid Economic Growth Expected In NE
Farm income is expected to fall below $2 billion for 2018. Revenue in 2018 will be the lowest recorded since 2002, and far below the peak of $7.5 billion in 2011 and 2013, but will grow to $2.4 billion in 2019, $2.5 billion in 2020 and $2.6 billion in 2021. While the farm economy remains sluggish, there are bright spots in the forecast. Nebraska’s overall employment will grow by 0.7 to 0.9 percent through 2021, and forecasters expect nonfarm income to grow up to 4.5 percent.
“This growth readily exceeds inflation and population growth, implying growth in real per capita income in Nebraska, from 2019 through 2021,” said Eric Thompson, economist and director of the Bureau of Business Research.
Manufacturing recorded strong growth in 2018, and employment in that sector has returned to near pre-recession levels. The forecast council expects that investments made in 2017 and 2018 will aid the growth trend. Notable growth in manufacturing will occur in non-durable goods, where the forecast council expects 1,800 jobs to be added. The opening of the Lincoln Poultry facility in Fremont will add many of these jobs. Manufacturing growth may stall later in 2019 and through 2020, Thompson noted, due to global uncertainties, including the outcome of Brexit, the strong dollar and a general slowing of other nations’ economies. Skilled labor shortages may keep businesses from investments and hiring, and the limping agricultural sector will also impact manufacturing in Nebraska.
“The pace of growth, however, should improve in 2021,” Thompson said.
Population growth will help stimulate growth in the construction and service sectors, according to the bureau. The construction sector will add 3,600 jobs in the next three years. The services sector, which includes the health care industry, will add between 5,400 and 6,100 jobs each year, aided by an aging population and real income growth. Federal government employment will remain flat but will add short-term jobs during the 2020 census. School districts will add about 2,000 jobs during the forecast period, due to growth in school-age populations, especially in metropolitan areas. Sectors likely cutting jobs through 2021 are retail, wholesale trade, information, and transportation and warehousing.
The Nebraska Business Forecast Council is composed of Phil Baker, Nebraska Department of Labor; David Dearmont, Nebraska Department of Economic Development; Ken Lemke, Nebraska Public Power District; Scott Loseke, Nebraska Public Power District; Brad Lubben, Department of Agricultural Economics at Nebraska; David Rosenbaum, Department of Economics and Bureau of Business Research at Nebraska; Jim Schmidt, Department of Economics at Nebraska; HoaPhu Tran, Nebraska Department of Revenue; Brian Williams, Nebraska Public Power District; and Thompson.
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