Shriveled in part by the drought's toll on agricultural production, real economic growth in Nebraska and Iowa lagged the nation's during 2012, according to new federal figures.
Nebraska's economy in 2012 grew 1.5 percent when adjusted for inflation, compared with 2.5 percent for the nation, and Iowa's growth fell just short of the nation's at 2.4 percent, according to preliminary data from the U.S. Bureau of Economic Analysis.
It marked the first time since 2005 — two years before the start of the Great Recession — that Nebraska's economic growth had appreciably trailed the nation's.
Nebraska's growth figure was dragged down by a far higher-than-average drop in agricultural productivity. Such production was down more than 10 percent in Nebraska — more than $500 million — compared with drops of 3.7 percent nationally and 6.7 percent in Iowa.
While grain farmers were somewhat protected by crop insurance payments, the drought particularly hammered livestock producers, said Creighton University economist Ernie Goss. Sparse pastures and high grain prices forced many producers to liquidate herds.
“There were some real issues with the drought,” Goss said.
The idled Fort Calhoun Nuclear Plant also has had an often-overlooked impact on the Nebraska economy, Goss said. Utility production was down 5 percent in Nebraska in 2012 and is down almost 18 percent in real terms since 2008. The Fort Calhoun plant, owned by the Omaha Public Power District, has been offline since April 2011 because of regulatory concerns.
“There are some strange things going on in energy, and I think Fort Calhoun is one of the big drivers,” Goss said.
Most other sectors in Nebraska posted solid growth, with 5 percent real growth in construction and 4 percent in manufacturing, including 7 percent in durable goods. There was 5 percent growth in wholesale trade and 4 percent in retail trade.
All the figures are subject to revision. Last year the BEA initially found Nebraska lagged the nation in growth but later revised the figure up significantly.
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