Nebraska Furniture Mart executive Bob Batt always has his eyes on the region’s entire economy, from hiring among Omaha’s Fortune 500 firms to the prices farmers are getting for their grain.
Half of the Omaha store’s sales, he said, come from outside the metro area.
That’s why Batt saw a lot to like Wednesday in an upbeat forecast from leading state economists, one that foresees solid growth in both jobs and income in Nebraska over the next two years.
Non-farm income is forecast to grow at a 5 percent clip in both 2011 and 2012, while farm income should continue to hover around the historical levels reached in 2010.
“We’re happy and we’re looking forward,’’ said Batt, the Mart’s executive vice president. “Compared to Arizona, Nevada and Florida, where it’s all doom and gloom, we’re doing much better here.’’
The economists who make up the Nebraska Business Forecast Council released the latest of their twice-annual forecasts Wednesday. In short, they predicted an economy that has struggled but still been among the strongest in the country over the last two years now will grow stronger.
Because of that strength, the economists say Nebraska sometime in the next two years should hit a significant milestone: total per-capita income in the state will exceed the nation’s after decades of lagging behind.
“It underscores the progress that the state’s economy has been making over the last decade, even as the state continues to work through the consequences of the global recession,’’ said Eric Thompson, director of the University of Nebraska Business Research.
The rest of the team of economists collaborating on the report included UNL’s Bruce Johnson and John Austin; Chris Decker of the University of Nebraska at Omaha; Tom Doering of the Nebraska Department of Economic Development; Ernie Goss of Creighton University; Ken Lemke of Nebraska Public Power District; Phil Baker of the Nebraska Department of Labor; Franz Schwarz of the Nebraska Department of Revenue; and Scott Strain of the Greater Omaha Chamber of Commerce.
As good as it sounds, Wednesday’s report does amount to a prediction, and it could be off the mark. In fact, a year ago the same group foresaw 1 percent job growth in Nebraska for 2010.
Instead, average growth for the year was flat.
Thompson said the group last year underestimated just how slow the housing sector would recover, and also how much concern about federal policies was making the private sector cautious about hiring.
Thompson said housing remains in a “healing phase,’’ the biggest threat to the job growth the economists see for the next two years. “Normally at this point in a recovery you sort of declare victory,’’ he said. “But this was not a normal recession, so it has not been a normal recovery.’’
In all, the economists are predicting Nebraska nonfarm jobs to grow 1.3 percent in 2011 and 1.8 percent in 2012. The job growth translates into almost 13,000 new jobs this year and 17,000 more in 2012, with employment by mid-2012 expected to exceed pre-recession levels.
The job growth during 2011 is expected across most sectors. The strongest: transportation and utilities (3.7 percent), durable-goods manufacturing (2.3 percent) and services (2.2 percent). The only sector expected to shed jobs is the federal government, where employment is expected to drop 4.6 percent amid budget belt-tightening.
Employment in local government, nondurable manufacturing and information, telecommunications and data is expected to remain flat during 2011.
Job growth will be a big driver as nonfarm personal income grows an estimated 5 percent in 2011 and 5.2 percent in 2012.
At the same time, farm income, which grew an estimated 58.6 percent in 2010, is expected to grow an additional 5.9 percent this year before dipping back slightly, down 4.4 percent, in 2012.
The economic conditions that fueled the huge spike in 2010, including worldwide growth in demand for grains and a declining dollar, should persist for years to come, the economists said.
With the income growth, the economists see good times ahead for retailers. Net taxable sales, which dropped off in 2009 before rebounding solidly with 3.2 percent growth in 2010, should grow 4.5 percent in 2011 and 4.3 percent in 2012.
Batt says the Nebraska Furniture Mart did see its sales fall in 2009. He’s still waiting on final figures for 2010.
He said the income growth the council foresees over the next two years is the first part of what’s needed to drive retail sales again. The other key element is consumer confidence, which he hopes can again reach pre-recession levels.
“They’ve got the money, but what are they going to do with it?’’ he said of consumers. “It’s just a matter of turning the corner and going forward.’’
Contact the writer:
444-1130, henry.cordes@owh.com
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