The Leading Economic Indicator – Nebraska (LEI-N) increased by 1.24% in July 2012, reversing a decline in both May and June. Improvement in the indicator after two months of decline suggests that Nebraska will be able to sustain slow economic growth during the winter of late 2012 and early 2013. An outright economic contraction will be avoided. The Leading Economic Indicator – Nebraska is produced by faculty and students in the Department of Economics and Bureau of Business Research (BBR) within the UNL College of Business Administration.
The Leading Economic Indicator – Nebraska is a composite of six components which predict future economic growth: single-family building permits, airline passenger counts, initial unemployment claims, manufacturing hours, the value of the U.S. dollar, and business expectations gathered from the
Survey of Nebraska Business.
“A drop in initial unemployment claims was the primary reason for the improvement in the LEI-N,” said Dr. Eric Thompson, director of the BBR. “Falling initial unemployment claims indicate stability in the Nebraska labor market. An increase in single-family building permits and a decline in the value of the U.S. dollar also were positive indicators for the Nebraska economy. The decline in the value of the dollar promotes export growth.”
Business expectations, however, provide a note of caution about the Nebraska economic outlook. Respondents to the
Survey of Nebraska Business expected a decline in sales and employment at their business over the next six months. This is another reason to expect that economic growth in Nebraska will be tepid during the upcoming winter months.
Looking over the rest of the year, Thompson said that recent values for the Leading Economic Indicator – Nebraska suggest that "the Nebraska economy will continue to grow at a moderate rate during the summer months but that growth will slow substantially during the fall. The Nebraska economy will grow, albeit slowly, during the fall and winter."
Published: August 17, 2012