The Omaha metropolitan area’s economy in March improved more than expected, according to an index that measures the health of the local economy.
The metro’s economy scored a 0.72 for March versus a mark of 0.40 for February, which was originally reported at 0.35, according to the Omaha Economic Index, where a score above zero signifies economic expansion.
The gains surprised Ken Kriz, the University of Nebraska at Omaha economist who developed the index along with UNO colleagues Christopher Decker and Mark Wohar.
“It was better than expected,” Kriz said, noting that the score could set the tone for the economy through the summer months. “It is a good start, and I think it’s more reflective of a strengthening of the national economy.”
Of the five factors measured in the indicator — nonfarm employment, taxable sales, residential and commercial building permits and industrial energy use — all but commercial building permits and industrial energy use, which was virtually flat from February to March, increased during the month. Growth was paced by a boom in residential building permits and nonfarm payrolls.
Kriz said the boom in residential building permits, which jumped from about 300 in February to roughly 500 in March, was caused by the unseasonably warm weather early in the spring.
“It’s a bit of an anomaly,” Kriz said. “With the warmer weather, builders want to put into the ground earlier, which could cause a shifting on residential building permits this summer.”
The earlier projects could cause a leveling off into the summer, which could negatively affect the overall OEI.
Nonfarm payrolls, meanwhile, appear to be on pace to continue as a strong performer in the five-variable index, Kriz said. In April, payrolls continued to perform well, and that trend has trickled into May, Kriz said. Those figures will be reflected in later versions of the OEI.
The Omaha Economic Index measures local economic activity for five counties: Douglas, Sarpy and Washington in Nebraska and Pottawattamie and Mills in Iowa. Kriz developed the index with Decker and Wohar to provide a previously unavailable monthly snapshot of the metro area’s economy.
“There are increasing signs that the economy is strengthening,” Kriz said. “We’re nowhere out of the woods yet, but we’re starting to see the edge.”
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