Neb. economic panel predicts slower job growth

LINCOLN, Neb.

Economic forecasters expect Nebraska's economy to remain steady over the next two years, according to a report released Monday.

The Nebraska Business Forecast Council said slower state job growth is expected this year, followed by accelerated growth in 2013.

"Overall, growth should remain solid in Nebraska," said Eric Thompson, assistant professor of economics at the University of Nebraska-Lincoln and the director of UNL's Bureau of Business Research, which publishes the forecast. "However, unlike recent years, the state's growth should hover near national levels, rather than exceeding it."

The forecast for moderate job growth this year is based on export markets weakening as the value of the U.S. dollar rises and economic growth drops in Europe and slows in Asia, the council said. These forces will affect Nebraska's export sectors.

The council projected that nonfarm income would rise 4.1 percent this year and 3.3 percent in 2013, primarily because of lower inflation this year and the end of the payroll tax holiday in 2013.

Farm income is also expected to dip from last year's record levels, which were primarily driven by high commodity prices from an increased world demand for food. Another boost for Nebraska was its continued ability to attract cattle feeders that rely on distillers grains from the state's ethanol plants.

But the council's report said the next few years were more uncertain because of possible outside shocks to Nebraska's agriculture industry. The strengthening dollar may harm agriculture exports and commodity prices, and the end of subsidies for corn-based ethanol could reduce the demand -- and price -- for corn.

The council expects Nebraska's services sector, which provides 38 percent of the state's jobs, to add about 8,400 jobs this year and 9,400 jobs in 2013.

The council includes economists from colleges, utilities, state government and business organizations.