Lincoln – The COVID-19 pandemic has upended the outlook for Nebraska’s economy.

The state’s economy has contracted sharply this spring, with a spike in unemployment and revenue losses for businesses.

While the state economy should recover rapidly, economic activity will drop in Nebraska for 2020, according to the three-year forecast from the University of Nebraska–Lincoln’s Bureau of Business Research and the Nebraska Business Forecast Council.

Nebraska employment is expected to drop 2.4% in 2020 compared to 2019, with non-farm personal income falling 0.8% and farm income declining 22.6%.

“The economic downturn has been especially severe in industries that require face-to-face interaction between customers and workers, or which serve travelers or customers who crowd together,” said Eric Thompson, an economist and the UNL bureau’s director.

Assuming the spread of COVID-19 is brought under control, employment should bounce back quicker than after a typical recession as customers return to most industries and the business community adapts to changing consumer preferences. Nebraska employment is projected to grow 2% in 2021 and 1.4% in 2022.

The rate of job loss in Nebraska, while substantial, has not been as rapid as nationwide.

“Nebraska has a smaller share of employment in several hard-hit industries,” Thompson said.

Nebraska has less employment in travel and tourism than the nation and is not focused on motor vehicle or oil production. Nebraska also has a larger share of employment in the essential industries of food production and processing, and industries such as finance and insurance, where there is more potential to work from home.

– UNL