Bureau of Business Research
Date of this Version
6-28-2016
Citation
Prepared for the Nebraska Manufacturing Extension Partnership by Dr. Mitch Herian and Dr. Eric Thompson
Abstract
The purpose of this report is to provide an economic snapshot of the Nebraska manufacturing industry. In particular, the report is designed to present contributions of manufacturing to the state economy, recent trends in Nebraska manufacturing, and considerations for the future of Nebraska manufacturing. The information contained within the report will help policy makers and stakeholders better understand the current state of manufacturing in the state, particularly in relation to recent demographic and economic trends in Nebraska and the United States. The report finds that the manufacturing sector has a significant impact on the Nebraska economy. Approximately 10 percent of the Nebraska workforce is engaged in manufacturing. This is typical of what is found in most states. Manufacturing also accounts for about 13 percent of value-added in the Nebraska economy. Value-added is the same concept used to measure gross domestic product. These direct impacts, however, only partially reflect manufacturing’s impact on the Nebraska economy. The total economic impact, including the multiplier impact, is even larger. Including the multiplier impact, Nebraska manufacturing accounts for about one-quarter of Nebraska’s economy. The prospects for the manufacturing sector, therefore, will play an important role in the future of the Nebraska economy. In terms of future prospects, the Nebraska manufacturing sector has a number of advantages including growing exports, lower electricity prices, a skilled workforce, the presence of workforce training, and services from the Nebraska Manufacturing Extension Partnership. In addition, Nebraska enjoys strength in food processing and other agriculture related industries. The Food Manufacturing sector accounts for 37% of the total Nebraska manufacturing employment statewide. This sector of the industry appears to be in a favorable position, given the relatively low prices of relevant commodities. Machine manufacturing, which includes production of agricultural machinery and implements, accounts for 11% of state manufacturing employment. The report also finds that Nebraska has largely followed national trends in manufacturing in the last decade. Employment has grown in many years but suffered steep declines during the Great Recession of 2007 through 2009. There also has been a drop recently due to pressure from a strong dollar. Industries producing non-durable goods appear to have returned to pre-recession levels of employment, while employment in durable goods industries has failed to recover. As of 2014, the Nebraska manufacturing sector had approximately 97,500 wage and salary workers and another 1,500 selfemployed individuals who operate “nonemployer” firms. Examination of geographic differences in manufacturing produce several notable findings. Manufacturing employment in metropolitan areas of the state followed national trends, with employment decreasing during the recent recession. However, manufacturing employment in the Omaha and Sioux City metropolitan areas has recovered, while employment in the Lincoln metropolitan area has not. Further, manufacturing comprises a substantial portion of the adult workforce in a number of Nebraska counties, both metropolitan and non-metropolitan. In general, the counties with the largest proportion of adults working in manufacturing are those counties with large food processing operations.