Economy looks promising for Nebraska, Lincoln residents

Economic growth is predicted to continue for the state of Nebraska through 2013, according to a report by the Nebraska Business Forecast Council that was recently released. However, jobs are expected to increase at a slower-than-expected pace.

Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln, said Nebraska's resources, good labor force and limited inflation in the housing sector have contributed to the predicted growth.

"When home prices started to fall, ours didn't fall very far," he said. Thompson said the rest of the nation experienced a 30 percent to 40 percent decline in home prices, but homes in Nebraska did not decline as much in value.

Bruce Johnson, professor of agricultural economics, points to the agricultural sector in Nebraska's business forecast. Johnson said that a strong agricultural economy worked in Nebraska's favor.

Johnson also credits the "conservative approach" Nebraska takes to the financial sector as a positive factor.

"It (agriculture) went the opposite of other sectors," he said.

Thompson agreed that during the recession period, the agriculture industry performed very well.

He added that other agriculture-based states such as Iowa, North Dakota and South Dakota experienced the same growth and "boom years."

Thompson said the insurance industry was steady throughout the business cycle, adding that while the insurance industry doesn't really have a "boom or bust," it aids with the overall economic picture.

"(Insurance) doesn't always lose a lot of employment," he said.

The labor force was also a reason for the recent growth, Thompson said. He said Nebraska has the highest high school graduation rates, an above average share of the population who are college graduates, a high labor force participation rate and high multiple job-holder rates.

"Nebraskans have good resumes, lots of education and work experience," he said.

While the overall economic growth of Nebraska looks favorable, job growth will be moderate during the next year. Johnson attributes this to jobs in the public sector not growing and more productivity per worker.

"Companies have fewer or the same amount of workers and are accomplishing more," he said.

Thompson said that another reason for the slow growth in the job market is that Nebraska is an export state, and the rising value of the U.S. dollar will cap the export growth. Thompson said that's fine, because Nebraska is far ahead in measures such as unemployment rate. He predicted that the second half of the year will see a stabilized dollar that may allow jobs to grow at a little bit of a faster rate.

"The rate of growth will continue, but it will come in a little bit," he said.

Thompson and Johnson think that with an increasingly strong economy and UNL's entrance into the Big Ten, the Lincoln area is becoming an increasingly attractive area for students and those out of state.

"I think UNL bodes well for the Lincoln economy," he said adding that it increases the workforce in the city.

Johnson said that the Lincoln-Omaha metropolis is a desirable relocation spot for recent college grads, but it is conditional to employment opportunities.

"Lincoln is a good place to live across a wide population," he said.

LARRYBROWN@DAILYNEBRASKAN.COM