Nebraska Economic Growth: 1st Quarter of 2018
Nebraska saw some of the nation’s slowest economic growth in the first quarter of 2018.
New government statistics from the U.S. Bureau of Economic Analysis show that Nebraska experienced 0.9 percent Gross Domestic Product growth in the first quarter of 2018. However, Nebraska’s growth was significantly slower than most other states in the country, only surpassing Maine (0.6), Kansas (0.5), Idaho (0.4), Arkansas (0.0), and North Dakota (-0.6).Nebraska’s growth was consistent with the fourth quarter of last year, which also grew at 0.9 percent.
Economic growth is a positive for Nebraska, especially after coming out of a small recession early last year. The recession stemmed from commodity prices dropping significantly after peaking in late 2013 and early 2014.
However, the numbers suggest the economy is not recovering at the same speed as neighboring agricultural states such as South Dakota, Iowa, and Missouri who showed a growth of 3.1 percent, 2.9 percent, and 2.4 percent respectively.
The BEA report also coincides with a new economic indicator report from Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln. Thompson’s report, which details the economic outlook of the state six months in advance, indicates that Nebraska’s economic growth will decline about 0.4 percent in the fourth quarter of this year. Thompson explains the main reason for this decline was that, “a rising dollar increases competitive pressure on agriculture, manufacturing and other businesses which export.” He also suggests that fewer hours for manufacturing jobs and an increase in unemployment insurance contributed to this estimate.
While the BEA’s report indicates economic growth in the first quarter, it mirrors the same results from the fourth quarter of last year at an underwhelming 0.9 percent. Policymakers should keep an eye on these numbers in the next few quarters. It’s difficult to draw conclusions from a single quarter, but if Nebraska’s GDP continues to grow at a dismal pace while other agriculture-based states continue to excel, it may indicate Nebraska should take a different approach to its economic policies.