Cindy Gonzalez
OMAHA — While Nebraska’s manufacturing engine may be “losing steam,” it’s still chugging along better than most of its neighboring states and the nation, the director of a regional economic survey said Monday.
“There’s little doubt, almost everything confirms, that the manufacturing sector is either in a recession or right on the edge of it,” said Creighton University’s Ernie Goss, whose Economic Forecasting Group produces a monthly business conditions report based on a survey of manufacturing supply managers in a nine-state area.
“But Nebraska has held up better than the region and the nation,” Goss said.
Regionally, the business conditions index overall for the nine states slumped in November below the 50.0 growth neutral threshold. That drop, to 42.2, followed two consecutive months of above growth neutral readings.
Goss called it the lowest reading recorded since June 2020, or early in the pandemic.
Nebraska’s index also sank, from 48.8 in October to 39.3. But the Cornhusker state’s manufacturing sector boosted employment over the past year by 2,000. And its average manufacturing hourly rate climbed by 6.3% for that period, above the regional average of 3.4% and well above the 3.2% increase in consumer prices, Goss said, citing the U.S. Bureau of Labor Statistics.
Goss said the Nebraska outlook has much to do with the weight food processing carries in its manufacturing sector.
Creighton has conducted the monthly survey of manufacturing supply managers since 1994 as a barometer of economic health for “Mid-America” states. Besides Nebraska, states surveyed are Arkansas, Iowa, Kansas, Minnesota, Missouri, North Dakota, South Dakota and Oklahoma.
Looking ahead six months, the economic optimism captured in the region’s November survey increased “to a weak 35.8 from October’s anemic 25.0,” Goss said. “Only 14% of supply managers expect expanding business conditions over the next six months.”
He said the survey indicated “labor hoarding” by some manufacturers who didn’t want to let employees go for fear they wouldn’t be able to staff up again.
“Even so, government data show that the region has lost 12,000 manufacturing jobs since April of this year,” he said.
Asked to identify the greatest economic threat for their firm in the next six months, six of 10 supply managers surveyed said a recession; two of 10 said labor shortages; one of 10 said inflation; and one of 10 said higher interest rates.
As for this year’s Christmas shopping season, Goss projected retail sales, adjusted to inflation, to grow about 1% in the nine-state region.
He said if shoppers are turning to online Amazon to deliver packages, much of the economic impact likely is going someplace other than Nebraska.
“Buy local,” he said.