After strong growth in the summer and fall, the Nebraska economy may cool in late 2016, according to the latest leading economic indicator report from the University of Nebraska-Lincoln. 

 

The indicator, a composite of economic factors that predict growth six months into the future, decreased by 0.28 percent in May. 

 

“The rapid increase in the value of the leading indicator signals strong economic growth in Nebraska during the second half of 2016” said economist Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln.
 

“Nebraska’s leading indicator dropped during May due to a decrease in manufacturing hours and an increase in initial claims for unemployment insurance,” said economist Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln. “There also was an increase in the value of the U.S. dollar, which is negative for export-oriented businesses in the state.”

 

May’s decline, however, followed two sharp increases in the leading indicator during March and April, Thompson noted. Taken together, results for the last three months suggest strong growth in the Nebraska economy during the summer and fall of 2016, but that growth may cool towards the end of the year. 

 

There were some positive components of the leading indicator during May. In particular, there was a modest increase in building permits for single-family homes, and strong business expectations. Respondents to the May Survey of Nebraska Business predicted strong growth in both sales and employment at their businesses over the next six months.   

 

The leading economic indicator report is produced monthly by faculty and students in the Economics Department and the Bureau of Business Research in UNL’s College of Business Administration.