A September survey by the University of Nebraska-Lincoln’s Bureau of Business Research showed mixed expectations for sales and employment growth in Nebraska. Businesses were somewhat optimistic in their outlook for employment growth in the state but also somewhat pessimistic about sales growth. Results overall suggest limited expectations for growth.
Within the state, expectations remained positive in the Omaha and Central Nebraska but turned negative in Northeast and West Nebraska, according to an analysis of August and September responses by region.
In September, 23 percent of businesses responding statewide said they expected sales to increase, while 26 percent predicted a decline in sales. Most predicted employment will remain steady, though 9 percent anticipated adding jobs and 7 percent expected to reduce employment.
UNL economist Eric Thompson, director of the Bureau of Business Research, said results may signal slower growth in the Nebraska economy next year.
“Nebraska businesses overall retained their steady, optimistic outlook,” he said. “Business expectations are supportive of continued economic growth through early 2015.”
“After 7 consecutive months of positive expectations, Nebraska businesses reported a mixed outlook in September,” he said. “While we should carefully track survey results from October and November, findings for this month suggest economic growth may slow in Nebraska in the coming months, particular in early 2015.”
For the second consecutive month, nearly one in five responding businesses indicated the availability and quality of labor was the top concern facing their business. This concern has grown throughout the year as the labor market has continued to strengthen.
The surveys are sent each month to 500 randomly selected Nebraska businesses. In September, 142 businesses responded, for a response rate of 28 percent. Thompson combined August and September responses to create a sample size large enough to analyze economic trends by region.
Omaha area businesses were significantly more optimistic about sales and employment in coming months. Omaha areas businesses also were less likely to list customer demand as their top concern, instead focusing on regulation and taxes. “Such responses would be expected in a faster growing economy,” according to Thompson.
Central Nebraska businesses also were more optimistic about sales and employment. Falling crop prices did not dim business optimism in this region, which includes the Grand Island Metropolitan Area as well as Hastings and Kearney. Central Nebraska businesses “were much more concerned about the availability and quality of labor than businesses in other regions of the state,” according to Thompson.
Businesses were only modestly optimistic in Southeast Nebraska, which includes Lincoln. Business expectations moderated significantly in this region, after several months of strength.
The northeast and west regions were negative in their outlook for growth. In both regions, businesses were more likely to report that they expect to reduce sales and employment than increase them. Weak population trends and low prices for crops may have impacted the outlook in both regions.;
Nebraska Business Survey - October 2014