OMAHA, Neb. (AP) — The current drought and the rising value of the U.S. dollar are expected to hold down farm incomes in the state over the next two years, said the latest forecast report from the Nebraska Business Forecast Council.
Nonetheless, the forecasters said they expect modest Nebraska economic growth overall through 2014.
“While the outlook for growth has weakened somewhat, the Nebraska economy is expected to grow at a moderate pace over the next three years,” said Eric Thompson, director of the University of Nebraska’s Bureau of Business Research, which publishes the twice-a-year forecast.
“However, the prospects of a slowing global economy create risks for our state’s export-oriented economy,” Thompson said. “The potential exists for a second recession next year, though this is not the most likely outcome.”
The council expects total job growth to be an even 1 percent by the end of 2012, and then rise slightly by 1.4 percent in both of the next two years.
That estimate was somewhat lower than the council’s forecast in (1.3 and 1.7 percent, respectively), reflecting weakness in job creation.
Annual farm incomes soared to a record $5.4 billion last year, but were forecast to drop $3.5 billion this year, then rise to $4.1 billion in 2013 and remain at the figure in 2014.
Thompson said the drought illustrates the increasing income volatility facing agribusiness operators.
Non-farm incomes, meanwhile, were expected to climb 3.5 percent overall in 2012, followed by gains of 3 and 4 percent in 2013 and 2014, respectively.
The report said the state’s services sector — which includes health care, professional, arts, recreation and entertainment — should continue broad growth through 2014.
Modest improvements in building permits and housing starts for single-family homes and town homes are expected as well.
Nebraska’s manufacturers, which lost nearly 10,000 jobs during the recession, were likely to continue recovering. But productivity gains suggest the state may not see the same number of manufacturing jobs.
