A sharp increase in Nebraska’s leading economic indicator suggests that the state’s economy will grow strongly during the second half of 2015.
After a solid first quarter, the indicator leapt by 1.99 percent in April. It is the biggest increase of the last six months.
Strong business expectations, a recent decline in the value of the dollar and a reduction in initial unemployment claims contributed to the rise, said economist Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln.
“The drop in the value of the U.S. dollar in April provides some relief to Nebraska’s export businesses,” he said. “The dollar had risen for eight consecutive months prior to April, creating competitive pressures for exporters in agriculture and manufacturing.”
The outlook also has brightened for other types of businesses, according to the April Survey of Nebraska Business. Thompson described respondents to the April business survey as “very optimistic for growth in both sales and employment at their businesses over the next six months.”
A sharp decline in initial claims for unemployment insurance provided further evidence that the labor market is strengthening.
The remaining three components of the indicator – home building permits, airline passenger counts and manufacturing hours – held steady during April.
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.
The full report and a technical report describing the indicators are available at the UNL Bureau of Business Research website, http://www.bbr.unl.edu.