July 25, 2018

Nebraska indicator predicts slow economic growth at end of 2018

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Economic growth will slow significantly in Nebraska during the fourth quarter of 2018, according to the most recent leading economic indicator report from the University of Nebraska–Lincoln.

The indicator, a composite of economic factors that predict economic growth six months into the future, declined 0.4 percent during June.

“The leading indicator fell in June for the first time during 2018,” said economist Eric Thompson, director of the Bureau of Business Research at the university. “The decline suggests that the pace of economic growth will slow significantly at the end of 2018.”

A sharp increase in the U.S. dollar was a primary reason for the decline.

“A rising dollar increases competitive pressure on agriculture, manufacturing and other businesses that export,” Thompson said.

A decline in manufacturing hours and an increase in initial claims for unemployment insurance also contributed to the June drop.

Business confidence was one positive component. Respondents to the June Survey of Nebraska Business reported plans to increase sales and employment at their businesses over the next six months. There also was an increase in building permits for single-family homes.

The leading economic indicator report is produced monthly by faculty and students in the Bureau of Business Research in Nebraska’s College of Business.

Read the full report and a technical report describing the indicators.

Video: Eric Thompson discusses the June leading economic indicator report