Nebraska’s leading economic indicator fell slightly in July, according to the most recent report from the University of Nebraska–Lincoln. The indicator, designed to predict economic activity six months into the future, fell 0.08%.
“The July decrease suggests slow economic growth in Nebraska for the rest of year and the beginning of 2023,” said Eric Thompson, director of the Bureau of Business Research and K.H. Nelson Professor and chair of economics.
The six components of Nebraska’s leading economic indicator are business expectations, building permits for single-family homes, airline passenger counts, initial claims for unemployment insurance, the value of the U.S. dollar and manufacturing hours worked.
The leading indicator fell for two primary reasons. First, there was an increase in the value of the U.S. dollar in July.
“An increase in the value of the dollar creates challenges for businesses such as agriculture and manufacturing, which compete in international markets,” Thompson said.
Second, there was a decline in airline passenger counts. This drop is likely a response to a sharp increase in ticket prices, Thompson said.
Despite these challenges, Nebraska businesses remain confident about the future. Respondents to the July Survey of Nebraska Business reported plans to increase sales and employment over the next six months.
“The small businesses that respond to the Survey of Nebraska Business continue to see opportunities to expand, despite rising interest rates and other challenges facing the Nebraska economy,” Thompson said.