Nebraska’s Economy Surges: A 5% GDP Growth in the Third Quarter
Nebraska’s economic performance continues to impress as the state witnessed a 5% increase in its gross domestic product (GDP) for the second consecutive quarter, as reported by the U.S. Bureau of Economic Analysis (BEA). This growth places Nebraska alongside Iowa and Vermont, securing the 13th position in terms of GDP growth for the third quarter of 2025.
The nationwide GDP also saw a promising rise of 4.4% during this period, marking it as the highest national growth rate recorded in 2025. Governor Jim Pillen expressed his satisfaction with Nebraska’s economic progress through a social media post, stating, “The data is in — and Nebraska’s economy is knocking it out of the park.”
The year 2025 has been marked by economic fluctuations for Nebraska. The state experienced a significant setback in the first quarter, as it tied with Iowa for the largest GDP losses at 6.1%. However, a strong recovery followed in the second quarter with a 5.2% growth, ranking sixth nationally. More details can be found here and here.
Despite this economic upswing, Nebraska’s tax revenue has not matched the GDP growth. The state’s tax receipts for the third quarter showed a net decline of approximately $15 million compared to previous forecasts. This shortfall comes as Nebraska lawmakers are in the midst of a 60-day legislative session, attempting to address a projected $471 million budget deficit. Further budgetary adjustments may be required, depending on the state’s Economic Forecasting Advisory Board’s meeting in February, especially as November and December’s tax receipts fell short by about $46 million.
State Sen. Brad von Gillern, chair of the Revenue Committee, remarked on the importance of upcoming economic data: “January’s receipts will be quite telling. Then the forecasting board, which meets on February 27 … that will be very telling. That will determine our destiny for the rest of the session.”
Von Gillern noted that while the recent tax shortfalls are concerning, their impact is minor when viewed against the backdrop of Nebraska’s $5.5 billion general fund. Legislative Fiscal Analyst Keisha Patent emphasized that while GDP growth is a positive indicator, it does not directly translate to increased tax revenue, as the state’s receipts encompass various industry contributions. Patent pointed out that states like Kansas and South Dakota saw significant GDP growth due to agricultural contributions.
Despite the complex relationship between GDP growth and tax receipts, Patent remains optimistic, suggesting that Nebraska’s GDP growth could offset some of the negative effects of lower-than-expected tax collections. State Sen. Rob Clements, chair of the Appropriations Committee, also views the GDP growth as a favorable sign, stating, “More economic activity means more sales taxes and more income taxes in the long run. That’s really reassuring to me.”
