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Nebraska’s economy will continue to grow over the next three years, though lagging farm income -- due to tariffs and low commodity prices -- will dampen the growth.

Manufacturing, construction and service industries will add jobs, buoying the state’s economy, according to the new three-year forecast from the University of Nebraska-Lincoln’s Bureau of Business Research and the Nebraska Business Forecast Council.

Farm income was expected to fall below $2 billion in 2018, which would be its lowest level since 2002. It's expected to start growing again this year, hitting $2.4 billion, then increasing to $2.5 billion in 2020 and $2.6 billion in 2021. Those levels are barely one-third of the peak of $7.5 billion reached in 2011 and 2013, however.

While the state's farm economy will remain sluggish, there are bright spots in the forecast. Nebraska’s overall employment will grow by 0.7 to 0.9 percent through 2021, and forecasters expect nonfarm income to grow as much as 4.5 percent.

“This growth readily exceeds inflation and population growth, implying growth in real per-capita income in Nebraska, from 2019 through 2021,” Eric Thompson, economist and director of the Bureau of Business Research, said in a news release.

Manufacturing recorded strong growth in 2018, and employment in that sector has returned to near pre-recession levels statewide. The forecast council expects the sector will continue to grow.

Notable growth in manufacturing will occur in non-durable goods, where the forecast council expects 1,800 jobs to be added. The opening of the Lincoln Premium Poultry facility in Fremont later this year will add many of these jobs.

Manufacturing growth may stall later this year and through 2020, Thompson noted, due to global uncertainties, including the outcome of Brexit, the strong dollar and a general slowing of other nations’ economies. Skilled labor shortages may also keep businesses from investments and hiring. The stagnant agricultural sector also may hurt manufacturing in Nebraska.

Population growth will help stimulate growth in the construction and service sectors, according to the bureau. The construction sector will add 3,600 jobs in the next three years, and the services sector will add between 5,400 and 6,100 jobs each year, aided also by an aging population and real income growth.

Sectors likely cutting jobs through 2021 are retail, wholesale trade, information, and transportation and warehousing, according to the forecast.

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Business editor/reporter

Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.

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