UNL report finds rapid decline in Nebraska economy in March
In a recent report, the University of Nebraska-Lincoln's Bureau of Business Research revealed that March 2020 saw a stark drop in the state's economy. They found a rapid decline with the leading indicator showing a loss at -7.96%, with 'Rapid Decline' defined as a drop between 4.5% and 9%.
Eric Thompson, Director of the Bureau of Business Research, was quoted in the release saying “The March decline primarily reflected a spike in initial claims for unemployment insurance and the sharp drop in airline passenger enplanements during the month.” Other factors like manufacturing jobs, agricultural impacts from oil prices plummeting, and home building permits are parts of the indicator.
Thompson spoke with Local4 about how oil prices affect the agricultural sector of Nebraska. "Because of the global economy, the global economic recession, we've seen the price of oil drop precipitously. And that has implications for the ethanol industry, which therefore that impacts agriculture as well."
There may be opportunity for growth in the coming months, but he expanded with measured optimism. "Even though I think that the recovery will be fairly strong, as people can get back to work, I think we won't be able to fully recoup what we've lost.” While he does not expect another dip in the economy, the net year-over-year trend will be a smaller economy. “By the fall of this year, while we will have recovered quite a bit, I still think the economy will be smaller than it was at the beginning of the year."
While Nebraska has seen economic downturn before, an example given was the Great Recession in the late 2000's, he felt Nebraska would not be affected as harshly as other areas of the country. He highlighted the difference between that period and now as the coupling of the economic downturn with a global health crisis. While the economy will recover when consumers return and begin buying more, that now comes with a risk. Thompson advises consumers to use proper caution, monitoring their own household needs, and when the time is right to begin investing in the economy once more.
You can find the full report at the following web address