Nebraska’s leading economic indicator rose in August, according to the most recent report from the University of Nebraska–Lincoln. The leading indicator is designed to predict economic activity six months into the future.
The leading indicator rose 0.79%, reversing a small decline of 0.2% in July.
“The rising indicator suggests that the Nebraska economy will continue to grow through the first quarter of 2022,” said economist Eric Thompson, director of the Bureau of Business Research and K.H. Nelson Professor of Economics. “The leading indicator improved due to an increase in manufacturing and construction activity and strong expectations among businesses in general.”
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. Three of the six components rose during August, while the other three changed little.
Building permits for single-family homes rose during August after declining in early summer due to employee and material shortages.
“The August increase suggests construction businesses are adjusting to supply challenges facing the industry,” Thompson said. “Permits declined sharply in June and July due to challenges in finding workers and obtaining building materials.”
By contrast, the increase in manufacturing hours worked reflects steady improvement throughout 2021. Thompson said the manufacturing sector continues to benefit from strong consumer demand, especially for meat and other food products manufactured in Nebraska.
“Both goods- and service-sector businesses expect conditions to improve in the coming months as consumer spending and business investment continue to grow,” Thompson said. “Nebraska businesses responding to the August Survey of Nebraska Businesses reported plans to increase sales and employment in the coming months.”