A survey of Nebraska’s business leaders and supply managers finds economic conditions continued to worsen during June. Creighton University’s monthly survey ranks the state’s economy on a scale of zero to 100, with 50 being “growth neutral.” Creighton economist Ernie Goss says Nebraska’s score of 47 during June is the fifth time this year below growth neutral, clear signs of an economic slowdown.
“What we’re seeing in Nebraska is, high energy prices are really cutting into the growth in manufacturing and even in non-manufacturing and we’re picking that up in our survey along with significant inflationary pressures stemming from those fuel and commodity price increases,” Goss says.
While some flooding hit Nebraska this spring, it was nowhere near as severe as flooding in other Midwestern states. Goss says some Nebraska growers who had no crop damage may be able to gain some advantage with the wide destruction elsewhere. “Those growers, those farmers that have crops, are going to see much higher commodity prices,” Goss says. “Corn, for example, is into record territory. But on the flip side, you’ve got a lot of livestock producers in Nebraska where the higher corn prices are really cutting into their profitability.”
Nebraska is the nation’s number-three ethanol producer and he says fluctuations in the commodities markets are taking a toll on that industry too. Goss says, “Corn-based ethanol producers, with these higher corn prices, we’re seeing some of the ethanol facilities that were coming online are just being delayed and in some cases, some of those ethanol producers are being taken off line, at least temporarily, due to these very high record corn prices.”
Weakness among firms with connections to domestic automobile manufacturing, food processing and information technology offset healthy growth among firms with ties to agriculture and the global economy, Goss says.