A monthly survey of business leaders and supply managers in Nebraska finds the state’s leading economic indicator fell a full point-and-a-half from September to October.
Creighton University economist Ernie Goss says Nebraska’s Business Conditions Index for the month was, in a word, “tepid.”
Goss says the entire nine-state Midwest region is experiencing a similiar downward slide, as new export orders are dropping.
“We’ve got to separate the grain-dependent industries where prices are very weak, that would be corn, soybeans and wheat principally, and then on the beef and pork side, they’re doing better,” Goss says. “Overall, you put it all together, the ag sector is bringing down the overall economy, bringing down the growth, I should say.”
The beef industry is worth more than $12-billion a year to Nebraska’s economy. It’s the state’s single largest industry. There are 20,000 beef cow operations in Nebraska with nearly two-million head of beef cows statewide. The state has another 4,600 cattle feeding operations, with more than five-million cattle fed and marketed per year.
The U.S. dollar is becoming stronger though, which Goss says has an impact across the board.
“When that number bounces up there, and it has been, it pushes ag prices down and pushes energy prices down,” Goss says. “Of course, that’s not all that bad. We’re now looking at gasoline prices, the best we’ve seen in a couple years.”
After rising to its highest level in more than three years in June, Goss says the overall index reading has hovered in a range pointing toward positive — but slower — growth for the regional economy over the next three to six months, with agriculture being key.
“Obviously, farm income for almost all of the nine states that we survey, very important and it’s heading in the wrong direction, unless you look at beef and pork, they’re doing better,” Goss says. “Overall, ag is weaker, probably going to be down income this year 10 to 12% from this time last year.”
Goss says growth for Nebraska’s nondurable goods producers, including food processors, more than offset weakness for durable goods manufacturers in the state.
Expansions for manufacturers in Nebraska have significantly helped the state’s trucking firms.
Goss says he expects Nebraska’s growth for the final quarter of 2014 to be well down from the same period in 2013.