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Report: Nebraska economy poised to rebound from COVID-19
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Report: Nebraska economy poised to rebound from COVID-19

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PennyGem’s Elizabeth Keatinge tells us why there could be downsides to a post-pandemic supercharged economy.

Nebraska will see a strong economic rebound this year and into next as the effects of the coronavirus pandemic continue to fade.

That's the conclusion of a new three-year forecast from the University of Nebraska-Lincoln’s Bureau of Business Research and the Nebraska Business Forecast Council.

Employment levels will rise, ultimately returning to pre-pandemic levels by 2022, according to the forecast. Nebraska employment dropped by 3.7% in 2020 compared with 2019 but is expected to grow by 2.6% in 2021 and 1.5% in 2022 before returning to a more normal 0.9% rate in 2023.

The forecast suggests that the recovery in jobs will be strongest where losses were greatest, in the leisure and hospitality industry and in state and local government. Some job losses will be permanent, however, as the economy restructures. Retail trade employment, for example, is not expected to return to pre-pandemic levels.

“While many jobs will come back, the pandemic has accelerated long-term trends in the economy, such as shopping and working from home,” said Eric Thompson, an economist and director of the Bureau of Business Research.

The outlook is also positive for Nebraska agriculture. Farm income is thought to have risen by 37% in 2020, according to the forecast, and much of that increase will be sustained in the next three years. The ag economy will benefit from recent increases in crop commodity prices, as well as ongoing transfer payments. However, the contribution of transfer payments to farm income will fade in 2022 and 2023, the forecast predicts.

Biz bits: Nebraska job market (relatively) strong

Nonfarm income growth will be solid in Nebraska, especially this year, thanks to stimulus checks, federal unemployment benefits and other transfer payments. Personal income should grow by 3.7% in 2021, but that growth is expected to drop to just 0.6% in 2022 as stimulus programs end. Nonfarm income growth is also expected to normalize in 2023, to 3.2%.

“Broad-based employment growth will be key for rising income in Nebraska, as it would create job opportunities for workers in most occupations,” Thompson said.

Among individual industries, service employment is expected to grow by 4.6% in Nebraska during 2021, including a rebound in employment in restaurants, hotels and other businesses within the leisure and hospitality sector. State and local government employment will change little in 2021 but is expected to grow by 2.4% in 2022.

Lincoln commercial real estate market mostly continues to struggle

The retail trade industry is expected to add 1,000 jobs during 2021, far less than the 4,000 jobs lost in 2020. The manufacturing industry is expected to add 3,200 jobs during 2021, and construction, which was one of the few industries to add jobs last year, is expected to add another 1,000 jobs.

Nebraska’s large and diversified financial services industry also is expected to add jobs. Employment should grow by 1.2%, or 900 jobs, in 2021.

Despite COVID-19, Nebraska's banks had record profits in 2020

Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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Business 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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Agriculture
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The average value of ag land in the state is $2,895 per acre, but values vary greatly across the state, from $6,840 an acre in the eastern part of the state to as little as $715 an acre in the Panhandle.

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