The Nebraska economy is slowly recovering from the COVID-19 crisis thanks to steady home sales and a downturn in unemployment claims, according to a new report.
The University of Nebraska-Lincoln College of Business released a report on June 24 illustrating the state of Nebraska’s economy. The monthly report measures the economy through key economic indicators such as the number of building permits, airline passengers and the dollar exchange rate. These indicators make up the economic indicator percentage, which increased by 2.45% for May.
Eric Thompson, a UNL economics professor and director of the Bureau of Business Research, said in a phone interview that the recent economic rebound can be attributed to businesses learning to adapt.
“I think what’s happened is people more and more have figured out how to operate their businesses and put people back to work,” he said. “Businesses will continue to find ways to adjust to consumer preferences.”
Most significantly, unemployment claims fell from record levels in the spring. In late March, the Nebraska Department of Labor reported that 24,527 unemployment insurance claims were filed in a single week. During the first week of June, unemployment claims were down to 4,869.
“They’re still unusually high, to be honest,” Thompson said. “We got to drive that down further, but there was significant progress.”
The recent indicator increase follows two sharp declines in March and April, likely due to COVID-19 restrictions and closures. In mid-March, the indicator reached as low as -6.86%.
The last time numbers were that low may have been the Great Recession of 2007 to 2009, but since the report has only existed for the past seven years, Thompson said he cannot compare the data.
“I don’t know of an example where the economy shrunk as fast as it did in March and April,” he said.
There was also an uptick in building permits for single-family homes. Barbara Byrd, the executive officer of the Nebraska State Home Builders Association, said she believes the Nebraska housing industry did not suffer as much as other states because Gov. Pete Ricketts deemed housing essential.
“Our projects that were in the pipeline continued to go throughout the pandemic. We were able to keep construction going,” she said. “We don’t see the severe downturn that other states see because we’re smaller and have a need for housing in most of our populated areas.”
Nationally, sales of single-family homes rose 16.6% in May, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Byrd also cites the creativity of realtors in maintaining buyers’ interest during a time when no one could leave their house.
“No one was leaving their homes, so they came up with new virtual ways to do that, which has helped traffic sales,” she said. “It’s a great time to buy a house.”
Another area of growth was the number of airline enplanements or passengers. Lincoln Airport saw a slight uptick in passengers in May from April, but still 92% fewer passengers than in 2019.
“The numbers are still so far off from thinking it’s a recovery,” said Rachel Barth, Lincoln Airport’s director of marketing and community engagement. “April was about as bad as it could possibly get.”
Although the future of the travel industry is still uncertain, the recent report projects six months of economic growth. Progress could be slowed if there is another spike in coronavirus cases in Nebraska or a drop in the global economy. Thompson also believes employment may bounce back more slowly.
“Even if the economy continues to recover, it may take a while to get back to pre-pandemic employment levels,” Thompson said. “Even as the output of the economy recovers, employment might recover more slowly.”
The full report describing the indicators can be found on the College of Business’ website.