Nebraska Manufacturing Growth Slows as Regional Economy Continues to Expand

By Allison Peck

The Tyson beef plant in Lexington, shown in December, 2026 closure accounted for 3,212 jobs. (Juan Salinas II/Nebraska Examiner)

Manufacturing activity across the Mid-America region remained in growth territory for the sixth consecutive month in July, according to the latest Creighton University Mid-America Business Conditions Index. While the regional economy continues to show steady expansion, Nebraska recorded the weakest manufacturing performance among the nine states included in the monthly survey.

The overall Business Conditions Index slipped slightly to 55.7 in July from 56.0 in June. A reading above 50 indicates growth in the manufacturing sector.

Ernie Goss, director of Creighton University’s Economic Forecasting Group, said regional manufacturers continue to perform well despite persistent inflationary pressures.

“Regional manufacturing growth continues on a solid pace but with elevated inflationary pressures at the wholesale level,” Goss said.

Inflation remains a major concern for manufacturers. Although the wholesale price index declined from June, it stayed well above growth-neutral levels, leading researchers to conclude the Federal Reserve is unlikely to lower interest rates over the next several months.

Supply managers also reported continued effects from the war in Iran. Nearly two-thirds said the conflict has led to shipping delays and higher transportation costs, while more than 93 percent reported they have been able to pass those increased costs on to customers.

Employment across the region showed modest improvement, with the manufacturing employment index moving above growth-neutral for only the second time in the past year. About one in four companies reported adding workers during July, while only one in 13 reported layoffs.

Some manufacturers also reported signs that production is returning to the United States.

“It is encouraging to see reshoring taking place,” one supply manager said. “Two major customers have moved operations from Mexico to the U.S.”

In Nebraska, the Business Conditions Index fell to 51.1 in July from 52.5 in June, the lowest reading among the nine-state region. While the state’s manufacturing sector continued to expand slightly, its employment index dropped to 46.6, indicating continued job losses.

According to U.S. Bureau of Labor Statistics data cited in the report, Nebraska has lost approximately 4,700 manufacturing jobs over the past 12 months, a decline of 4.6 percent. The food processing industry accounted for about 4,000 of those lost jobs.

Despite Nebraska’s weaker performance, business leaders across the region remain cautiously optimistic. The six-month Business Confidence Index climbed to 57.7 in July, its highest level since January. However, Goss warned that continued geopolitical tensions, higher oil prices and supply disruptions could weaken confidence in the months ahead.

The Creighton University survey measures manufacturing activity in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota and is considered a leading indicator of economic conditions across the Mid-America region.

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US manufacturing expansion continues in April despite Iran war

This year’s US manufacturing expansion extended into April even as the Iran war drove input prices sharply higher.

The Institute for Supply Management’s gauge of prices paid for manufacturing inputs climbed for a fourth straight month to a four-year high of 84.6, according to data released Friday.

The group’s measure of overall factory activity held steady at 52.7, matching the highest level since 2022. Readings above 50 indicate growth.

Military conflict in the Middle East and the effective closure of the Strait of Hormuz have disrupted supply chains around the world, driving up the cost of oil and other materials like aluminum and helium. Higher gasoline and diesel prices have also made shipping products more expensive.

Thirteen manufacturing industries reported growth in April, led by textile mills, nonmetallic mineral products and primary metals. Three industries indicated a contraction.

Sustained inflationary pressures may spur manufacturers to hike prices too, which could ultimately lead to higher costs for consumer goods. Data out Thursday showed the Federal Reserve’s preferred gauge of inflation jumped in March by the most since 2022.

The ISM report showed new orders picked up in April as production growth decelerated. A measure of supplier deliveries rose to the highest level since 2022, with the longer lead times likely a result of war-related disruptions.

Select ISM Industry Comments

“Demand for manufactured goods is trending higher versus last year; however, geopolitical uncertainty and rising oil and diesel prices continue to weigh on demand. Many customers are exercising caution and remain in a wait-and-watch mode.” — Transportation Equipment

“Geopolitical risk, especially in the Middle East, as it pertains to commodity and energy markets remains a concern and is being monitored by the business. Supply chain risk concerns pertaining to increased cost and transit time for rerouted shipments due to conflict in the Red Sea, Strait of Hormuz and Suez Canal.” — Transportation Equipment

“Continuing fluctuation in US tariffs as well as market constraints for certain materials are affecting our current business.” — Computer and Electronic Products

“All products tied to crude, polyethylene resin or energy (liquified natural gas) have seen multiple increase spikes tied to the Iran crisis and market supply inflation.” — Chemical Products

“Revenues are very strong. However, price increases are similar to a few years ago with the supply chain crisis. All imports from China are up 15 percent to 25 percent, which is impossible for us to absorb or to fully pass along.” — Chemical Products

“General uncertainty over the total impact of the U.S.-Iran war. Have not yet started to see the full impact of fuel increases but are aware they are coming.” — Machinery

“Business levels have been decent this year, in line with the same period last year and improved from the second half of 2025. However, higher cost pressures are impacting margins.” — Fabricated Metal Products

“Our business remains strong and stable, but there are a lot of concerns in the geopolitical arena. If the Iran conflict persists, the impact on market pricing and supply continuity could be extreme. Electronics component market remains very volatile (pricing and continuity) based on AI.” — Miscellaneous Manufacturing

The group’s gauge of employment fell to a four-month low, indicating factory headcount continued to shrink. The government’s April employment report is scheduled to be released May 8.

“Among panelists, 60% indicated that managing head counts remains the norm at their companies as opposed to hiring, and of those managing head counts, 34% are using layoffs and 43% using attrition or not backfilling positions,” Susan Spence, chair of the ISM Manufacturing Business Survey Committee, said in a statement.

— By Jarrell Dillard

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