The Leading Economic Indicator for Nebraska dropped by 0.52 percent in May, the second decline in the last three months. The new data, plus indicator reports gathered over the last three months, suggest that the Nebraska economy will grow this fall – but very slowly.

A sharp increase in the value of the U.S. dollar contributed to the drop in the latest leading indicator, said University of Nebraska-Lincoln economist Eric Thompson, director of the Bureau of Business Research, which produces the monthly figures. “The rising value of the dollar will weaken Nebraska’s agricultural and manufacturing export sector, which is an important component of state economic growth.”

A rise in initial unemployment claims and negative business expectations for the next six months also suggest a weak Nebraska economy in the fall, he said.

There were, however, some signs of strength, Thompson said: Manufacturing hours continued to expand moderately during May, while building permits and airline passenger counts also climbed, reversing declines from the previous month.

In the past six months, the UNL-generated indicator climbed steadily between December and February. This consistent improvement suggests there likely will still be solid growth in the state’s economy before slowing significantly in the fall, Thompson said.

The Leading Economic Indicator for Nebraska, which is produced by the Department of Economics and Bureau of Business Research in the UNL College of Business Administration, is a composite of six components that predict future economic growth. They are 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.

• BBR Complete Leading Economic Indicator Reports
• June Monthly Economic Indicator Report
• Audio Overview of LEI June Report

Published: June 15, 2012