A monthly survey of business leaders and supply managers in Nebraska and eight other Midwestern states finds an upturn in the overall business conditions index for December.
Creighton University economist Ernie Goss says trade numbers, both for exports and imports, fell significantly for the month but the leading economic indicator for the region rose for the first time since August.
“It’s really a pretty good number, that’s a good reading and it’s the 25th straight month it’s been above growth neutral,” Goss says. “We’ve been dropping for three straight months so this was good news to see it bounce up there and bounce up into what I’ll call very solid territory.”
Goss says the December report points to positive economic growth for the next three to six months, although the jobs index for the region fell from November.
“What we’re seeing now is the labor shortages,” Goss says. “We’re talking about an unemployment rate of 3.7% and, of course, that just means you’ve got not that many workers out there and that’s limiting growth. We could see growth being even stronger for the manufacturing sector.”
Job growth for the Midwest region is at 1.2%, versus 1.7% nationally, which Goss says is due to fewer available workers here. He says the outlook for profits in the new year remains strong, according to business leaders in the region.
“We asked about profitability,” Goss says. “We asked the companies to look out there for 2019 and about 43% expect higher profits this next year and that compares to only 19% seeing lower profits.” About 9% of respondents predicted no change in profits for the year ahead. Goss says those responses show there’s a real disconnect between what business leaders are seeing versus the poor performance of the stock market.
Nebraska’s overall economic index numbers dipped in December, though during the past 12 months, Nebraska’s job market has been healthy and stable. The state’s unemployment rate fell for the year from 2.5 to 2.3 % and the state’s unemployed ranks declined by 800 workers.
For 2019, Goss expects the leading industry for Nebraska will be machinery manufacturing, while the state’s lagging industries will be printing and publishing.