February 14, 2016

Nebraska’s consumer confidence dips while businesses show optimism

Consumer Confidence Index-Nebraska for January, 2016. (from UNL Bureau of Business Research)

Consumer Confidence Index-Nebraska for January, 2016. (from UNL Bureau of Business Research)

Consumer confidence is down at the beginning of the year, according to the University of Nebraska-Lincoln Bureau of Business Research (BBR).

The group’s monthly index shows a 4.3% decline from December to January.

BBR Director Eric Thompson says he is not surprised.

“I think the decline from December to January probably reflects sort of the end of the holiday season,” Thompson tells Nebraska Radio Network affiliate KLIN, “where there’s some optimism in the holiday season followed by a drop-off in optimism as those credit card bills come in in January.”

While consumer confidence is down, Thompson says approximately two out of five business owners are optimistic about the next six months.

“We know that in the Nebraska and U.S. economy right now, we have kind of a mixed picture with some sectors doing well, other sectors struggling,” Thompson says. “I think we see this in our two surveys as well where consumer confidence is weak, but the business confidence, business expectation seems to be stronger.”

The survey shows business owners are optimistic that sales and employment will grow during the next six months.

Among business owners’ top concerns, 42% of respondents cite customer demand, while the availability and quality of labor is on the top of mind for 18% of respondents.

Jane Monnich, KLIN, contributed to this report.

How to grow high-tech jobs a focus of Governor’s Ag Conference

Irrigation(Farm_Bureau)Nebraska farmers, ranchers and anyone interested in the state’s agriculture industry are invited to this year’s Governor’s Ag Conference.

“I think Nebraska agriculture loves the opportunity to gather together and learn about cutting edge issues and some of the policy considerations that affect their daily lives,” State Ag Director Greg Ibach says about the event in its 28th year. “This will prove a great opportunity to do that.”

The conference includes discussions on strategic planning, sustainability and new consumer trends.

Ibach says a key theme will be “grow Nebraska.”

“We’ll really focus on how we can look at biotechnology and bioscience opportunities here in Nebraska to maybe bring in the next round of jobs and job growth in Nebraska,” he says.

The Governor’s Ag Conference is March 2nd and 3rd in Kearney.

More information and registration is available here.

Nebraska state unemployment rate stays steady

Jobs[1]The state unemployment rate held steady at 2.9%.

The Nebraska Department of Labor has announced the December unemployment rate, seasonally adjusted, was 2.9%, the same as the November rate. It is down 0.2% from December of 2014.

Nebraska has the second lowest unemployment rate among the states, tied with South Dakota. North Dakota ranks first, with an unemployment rate of 2.7%.

Total nonfarm employment in December topped one million at 1,014,529. That’s up nearly 14,500 from December of 2014. The sector of education and health services experienced the most growth last year, up 6,910. Trade, transportation and utilities grew by 3,227, according to the Department of Labor; financial activities grew by nearly 1,500 jobs in 2015.

Though the state rate held steady, both of Nebraska’s metropolitan areas suffered slight slumps. The Omaha area had an unemployment rate last month of 3%, up from 2.8% in November. The same pattern was evident in Lincoln, which saw its unemployment rate rise from 2.1% in November to 2.3% in December.

The national unemployment rate also held steady at 5%.

Rural Mainstreet Index drops along with the stock market

The latest Rural Mainstreet Index fell for the fifth straight month and is at the lowest level since August of 2009. Creighton University Economist Ernie Goss conducts the survey of bank CEO’s in rural areas of ten states that include Nebraska. He says that number keeps going down. The index was 41.5 in December to a drop of 34.8 in January.

Goss says, “Banks are telling us with grain prices down, with beef prices down, pork prices down is spilling into the broader economy. Agricultural equipment sales are down to a record low level. We have farmland prices continuing to decline. Of course the global economic slowdown means our trading partners are buying less of our agriculture products.”

Wall Street has been on a roller coaster lately. Many analysts say two big factors impacting the markets are oil prices and the turmoil in China’s economy. Goss says that is a little overstated.

Goss says, “There are a lot of factors that are really going on. Fundamental for example, the market was overpriced to begin with. Now profits have weakened. We’ve got a federal reserve that is raising rates. I think this is not a time to be buying or selling.” Goss says now is not the time to try to “catch a falling knife”.

Another lean year predicted for agriculture, but then growth (AUDIO)

HarvestAgriculture might go through another rough year, but a University of Nebraska economist says the long-term outlook remains positive.

Farm income has fallen with the drop of crop prices from the record highs of 2011 and 2013, but Eric Thompson, director of the UNL Bureau of Business Research, says those prices are settling as a sustainable level.

“So, what we’ve seen over the last few years as crop prices have retreated from unusually high levels back to more long-term levels that the farm income has retreated as a result,” Thompson tells Nebraska Radio Network.

The Bureau’s long-term economic forecast predicts another down year for agriculture, before it begins to grow again. The forecast looks three years into the future. Thompson develops the forecast along with the Nebraska Business Forecast Council, a group of economists who work for UNL, the University of Nebraska at Omaha, utilities and various state government agencies.

Net farm income dropped to $4.57 billion in 2015, a drop of nearly 40% from its peak in 2013 of $7.5 billion. The economic model predicts another 11% drop next year before the rebound begins; down to a six-year low of $4 billion in 2016. Farm income is expected to grow 3.3% in 2018 to reach about $4.7 billion.

The bottom line, according to Thompson, is that even though farmers and livestock producers might have to suffer through another down year, they can expect prices to stabilize and incomes to rise, long-term. And that, Thompson says, bodes well for the state economy.

“Agriculture is a growing sector, it’s a technology sector in Nebraska, it’s an export sector, it’s got a bright future in the growing global economy.”

AUDIO:  Brent Martin reports [:50]