Nebraska gets average grades again for manufacturing, logistics

2013-06-19T14:00:00Z 2013-06-19T17:30:05Z Nebraska gets average grades again for manufacturing, logisticsBy MATT OLBERDING / Lincoln Journal Star JournalStar.com

Nebraska once again has received barely average grades in a national report on manufacturing and logistics.

The state received essentially the same grades in the the 2013 Manufacturing and Logistics Report Card from Ball State University's Center for Business and Economic Research as it did in 2012.

The center gave Nebraska a C-minus for manufacturing and a C-plus for logistics.

The state got its best grade, a B-plus, in human capital, a demonstration of Nebraska's reputation for having a well-educated, hardworking labor force. The state also got a B for expected liability gap, meaning it does not have a lot of unfunded pension or bond liabilities.

Nebraska got its lowest grade, a D-minus, in sector diversification, likely a reflection that manufacturing is heavily tied to agriculture. Nebraska also got a D in global reach, for low levels of foreign investment and a lack of manufacturing exports.

Nebraska's other grades were a C-plus in worker benefit costs and C-minuses in tax climate and productivity and innovation.

The C-plus in worker benefit costs was up from a C in 2012, while the D-plus in global reach was a drop from a C-minus last year. Those were the only grades that changed.

Michael Hicks, director of the Center for Business and Economic Research, said in a news release that Nebraska "continues to have many of the ingredients for manufacturing growth" but has yet to leverage those ingredients into rapid growth.

Hicks said the development of low-cost energy, ostensibly wind energy, could jump-start manufacturing not only in Nebraska, but in the entire upper Midwest.

Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln, said he agreed with some aspects of the report but thinks others are way off base.

For example, Thompson said the report is spot on about Nebraska's strength in human capital, and he also said he agrees that lower energy prices could boost manufacturing.

"Lower energy prices are already a major reason why many of Nebraska's existing manufacturers chose this state," he said in an email. "Therefore, significantly lower energy prices will be especially beneficial for the manufacturers located in Nebraska."

On the other hand, Thompson said the report, with its formulaic rankings, misses nuances about individual states.

"I think logistics is a major strength of the Nebraska economy, and the state should have been credited with a higher grade there," he said. "Also, our focus on agricultural-related manufacturing -- both inputs to production and processing -- is a strength rather than a weakness (sometimes diversification is not critical for a state if it has major advantages in a particular area), and also gives us substantial global reach."

Reach Matt Olberding at 402-473-2647 or molberding@journalstar.com.

Copyright 2015 JournalStar.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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