The majority of conversation during an Industrial Leaders Breakfast held a few months ago focused on Columbus’ manufacturing jobs and housing shortage.
But this go round, business leaders from around the community gathered inside of Wunderlich’s Catering & Barley Shoppe early Thursday morning to enjoy some breakfast and listen to two economists with the Nebraska Public Power District discuss the current forecast of national and state economies.
Ken Lemke and Brian Williams, both Ph.D. economists, both spent some time discussing some of the pressing issues relating to the flow of dollars nationally and domestically.
Nationally, Lemke said those making an effort to stay informed on global affairs continue hearing about the ‘Trade War’ with China, the United States’ direct economic competition.
“During the time following World War II, the U.S. was the major economic and military power in the world, and the (economic process) was working well,” Lemke said. “I think Europe was happy with it and (others) were happy with it. Of course, the U.S. being so dominant had its hiccups, but they weren’t major things."
With China emerging as a major economic player, Lemke said that agriculture has become a major bargaining chip and economic strategy for nations.
“The world has changed. Now China is an economic power to rival the United States,” Lemke said. “It doesn’t have the military power, but it is an economic power and it is growing in terms of its military ...”
He noted that China doesn’t necessarily subscribe to rules-based international order, which is described by the United Nations Association as a shared commitment by all countries to conduct their activities in accordance with agreed rules that evolve over time, such as international law, regional security arrangements, trade agreements, immigration protocols and cultural arrangements.
The world stage for the global economy is shifting which will lead to an economic readjustment, Lemke noted. Typically when this happens, unfortunately, ag normally takes a substantial hit.
“The one thing that will not change, however, is that going forward, when there are disputes between countries, especially with the United States, the first casualty is probably going to be agriculture,” Lemke said. “So, we will get through this agriculture deal, and hopefully see better days …
“And we will. Markets are wonderful things, they force you to do things you don’t necessarily want to do. So it will settle down, but agriculture remains at risk.”
In Nebraska, Williams said that steady economic growth has been seen across the board for several years. He noted that larger urban communities like Omaha and Lincoln will probably follow more similarly to national economic patterns, but that this differs in the majority of the state’s rural counties not named Douglas or Lancaster.
“The tricky part is when you get into rural parts of the state,” Williams said. “And so much of that is driven, not in Columbus, so much, but other towns that are so dependent on agriculture."
Trade disputes and disruption to normal ag business hurts these places the most, he said.
“China is one of our biggest customers …,” Williams said. “(Other than) Canada and Mexico, they are our biggest customer for our ag exports. So what China does really does impact our ag industry."
Although trading issues with China isn’t a plus for state producers, the far larger concern right now is salvaging land in the wake of the treacherous March flooding. Williams noted that he’s curious how much damage will be covered by insurance, as well as how much infrastructure repair dollars will come out of the federal government’s pockets versus the state’s.
“That will impact the state as a whole,” Williams said. “If we see the vast majority of that infrastructure (dollars) coming from the federal government – which I don’t think is going to happen in a huge amount, that could potentially provide a bit of a boost because it’s money coming in from the outside.”
Williams noted that though the flooding was devastating, the state’s economy shouldn’t take a major hit.
“Overall, we are looking at seeing fairly steady growth, slightly below what we are going to see nationally,” he said. "But, we are not going to see losses in the state, overall. We are still going to see some slow, steady growth as we’ve seen over the last few years.”
Sam Pimper is the news editor of The Columbus Telegram. Reach him via email at email@example.com.