by: Nate Kauffman and John McCoy

In contrast to the nation as a whole, goods-producing industries have accounted for much of the recent economic growth in Nebraska. Persistent demand growth for food, alongside construction, have been significant drivers of growth, both recently and longer-term. Moreover, a concentration in manufacturing has generally been a source of strength for Nebraska's economy, particularly in rural areas.

See the following for the latest update on the manufacturing sector in Nebraska. Or download the charts here.

Economic growth has remained steady, but slightly stronger on average in Nebraska than the nation.

A line chart displaying real gross domestic product for Nebraska and the United States. The chart shows that GDP growth for Nebraska has been steady and slightly above that of the nation for the last several quarters.

Sources: BEA, Haver Analytics

Despite weaker conditions in agriculture recently, economic activity in Nebraska has been supported by goods-producing industries.

A side by side graphic displaying the contributions to Nebraska’s GDP. The chart on the left is a stacked bar chart showing the total contributions from service-providing industries and goods-producing industries. The chart on the right shows the contributions from goods-producing sub-industries (agriculture, mining and construction, and manufacturing). Together, the two charts show that goods-producing industries have driven weaker GDP growth in Nebraska recently, and agriculture is the sub-industry behind the weaker goods-producing figure.

Source: BEA.

Economic output in manufacturing and construction has continued to increase at a steady pace.

A bar chart showing how real GDP for goods-producing industries has changed for both Nebraska and the United States. The chart shows that manufacturing GDP in Nebraska, particularly nondurable manufacturing, has increased at a steady pace.

Source: BEA

Employment in Nebraska’s goods-producing industries has also outperformed the nation, both recently and historically.

A line chart showing goods-producing employment for Nebraska and the United States in levels. The chart shows that unlike the United States, goods-producing employment has steadily increased over the past 14 years and is at an all-time high.

Sources: BLS, Haver Analytics.

Employment growth has been most pronounced in the categories of construction and “nondurable” goods.

A side-by-side graphic showing goods producing employment by sub-industry for Nebraska and the United States. The chart on the left shows employment in levels for Nebraska, showing that employment in 2023 and early 2024 is higher than 1990 in Nebraska in construction and nondurable manufacturing. The chart on the right shows employment in levels for the United States, showing that only construction employment is higher than in 1990.

Sources: BLS, BEA, Haver Analytics.

Demand for housing and commercial real estate, particularly industrial buildings, has supported construction activity.

A side by side graphic displaying real estate construction activity in Nebraska. The chart on the left shows housing permits in Nebraska, highlighting that permitting dramatically fell from the 2001-2005 average until recently returning to that level in 2023 and early 2024. The chart on the right shows new commercial real estate completions in square feet, indicating that though new office space has trended to zero, industrial space reached new highs in 2023.

Note: Per CBRE data, there were zero new completions of office space in 2023.

Sources: Census Bureau, Haver Analytics, CBRE-EA.

In agriculture, demand for food and fuel have contributed to persistent increases in agricultural commodity production.

A side-by-side graphic showing agricultural activity data. The chart on the left shows food expenditures and ethanol consumption in the United States, indicating that both series steadily increased from 2001 to 2023. The chart on the right shows crop and meat production in the United States, indicating that both products steadily increased from 2001 to 2023.

Sources: USDA and EIA

Manufacturing in Nebraska is a highly concentrated industry and has outsized importance to rural communities.

A bar chart showing manufacturing employment by geographic area for both Nebraska and the United States. The chart shows the percentage of total employment attributed to manufacturing for both Nebraska and the United States, as well as the share of manufacturing employment that is in concentrated areas, and the share of manufacturing employment that is nonmentropoiltan, concentrated areas. In Nebraska in particular, more of the manufacturing base is found in nonmetro areas that are concentrated in manufacturing. Concentrated areas are counties where the share of manufacturing employment is at least twice the national share.

Note: Concentrated areas are counties where the share of manufacturing employment is at least twice the national share.

Sources: BLS, staff.

Manufacturing is particularly concentrated in rural areas of Nebraska.

A map showing the share of manufacturing employment in nonmetro, concentrated areas. In Nebraska, 25.9% of all manufacturing employment is located in nonmetro areas that are concentrated in manufacturing. Concentrated areas are counties where the share of manufacturing employment is at least twice the national share.

Note: Concentrated areas are counties where the share of manufacturing employment is at least twice the national share.

Sources: BLS, staff.

More specifically, food manufacturing, tied to agriculture, is especially important in rural areas.

A bar chart showing manufacturing employment by sub-industry in Nebraska in 2023. The chart shows seven-sub industries, grouped into major durable (fabricated metal, machinery, and transportation equipment, all other) and nondurable (food, chemicals, all other) categories. The chart shows that the largest sub-industry in both Nebraska as a whole and the state’s nonmetro, concentrated areas is food manufacturing. Concentrated areas are counties where the share of manufacturing employment is at least twice the national share.

Note: Concentrated areas are counties where the share of manufacturing employment is at least twice the national share. Shares are calculated using data where the manufacturing sub-industry is known. For confidentiality purposes, some county-level sub-industry data is suppressed by the BLS.

Sources: BLS, staff.

Demographic headwinds and labor availability are a notable risk to future growth in nonmetro manufacturing hubs.

A side-by-side graphic showing demographic trends for Nebraska and the United States. The chart on the left is a line chart showing the population for metro and nonmetro areas in Nebraska and the United States, indexed to 2008. The chart shows that the population of metro areas has increased substantially from 2008 while nonmetro areas have declined. The chart on the right is a line chart showing the labor force for metro and nonmetro areas in Nebraska and the United States, indexed to 2008, as a three month moving average. The chart shows that the labor force in metro areas has steadily increased from 2008 while it has declined in nonmetro areas.

Sources: Census Bureau, BLS, Haver Analytics.

The Nebraska Economist features ongoing information and insights on the state's economy.

Authors

Nate Kauffman

Senior Vice President, Economist, and Omaha Branch Executive

Nate Kauffman is Senior Vice President and Omaha Branch Executive at the Federal Reserve Bank of Kansas City. In his role as the Kansas City Fed's lead economist and repres…

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John McCoy

Associate Economist

John McCoy is an associate economist in the Regional Affairs Department at the Omaha Branch of the Federal Reserve Bank of Kansas City. In this role, he supports research and ou…

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