Wichita Employment Forecast

Released May 3, 2021 (See previous version)

Average annual employment in the Wichita metropolitan area^[1] contracted by 6 percent in 2020, declining by more than 18,000 workers.  Employment fell by approximately 35,000 workers in the second quarter of 2020, the single largest one-quarter employment decline in the area’s history.  The area’s employment grew sharply in the third quarter, adding back more than 13,000 workers, before flattening in the fourth quarter of 2020 and the first quarter of 2021.  At a twenty-year low of 3 percent in the fourth quarter of 2019, the unemployment rate increased to 19 percent in April 2020 before declining back to 5.3 percent by March 2021.

The recovery is projected to resume in 2021, with employment expected to increase by 3.1 percent from the fourth quarter of 2020 to the fourth quarter of 2021.  Growth is expected to accelerate throughout 2021 as more sectors of the economy are able to return to normal due to increased vaccinations and declining levels of the novel coronavirus in the area.  The Wichita economy will remain especially vulnerable to downside risks during the recovery, such as additional disruptions to the already fragile aerospace manufacturing industry or additional coronavirus mutations that could cause further social distancing to be required.

• The production sectors are forecast to grow their employment by 2.8 percent from the fourth quarter of 2020 to the fourth quarter of 2021 after declining by 11.8 percent in 2020. The construction sector is expected to grow 3.2 percent, exceeding its pre-pandemic employment peak by the fourth quarter of 2021 as the demand for residential construction remains high in the area.  The durable goods manufacturing sector is projected to grow 2.8 percent through the fourth quarter as the demand for commercial aircraft begins to resume.
• The trade, transportation, and utilities sector is forecast to be Wichita’s fastest-growing in 2021, expanding 4.2 percent from the fourth quarter of 2020 to the fourth quarter of 2021. The wholesale trade is forecast to grow 6.7 percent, while retail trade employment is expected to grow 4.5 percent as retail sales in the area regain some of their 2020 declines.  Both sectors are projected to recover significantly from their 2020 job losses but remain modestly below their pre-pandemic employment peaks.
• Employment in the service sector is projected to grow 3.2 percent from the fourth quarter of 2020 to the fourth quarter of 2021, erasing much of the 4.6 percent decline in 2020. The leisure and hospitality sector is expected to see the largest jump in employment, expanding 6.8 percent, due to restaurant and travel activity reaching near-normal levels later in 2021.  The financial activities sector and the professional and business services sector are projected to grow 3 and 4 percent by the fourth quarter of 2021, respectively, returning to near their pre-pandemic peak employment.  The health care sector is expected to have the slowest growing service sector, expanding by only 0.6 percent by the fourth quarter of 2021, after experiencing one of the smallest service sector declines in 2020, contracting 1.1 percent.
• Wichita’s government sector is projected to increase its employment by 1.8 percent from the fourth quarter of 2020 to the fourth quarter of 2021 after declining by almost 3 percent in 2020. Local government employment is expected to grow 2.6 percent, adding more than 700 jobs.

[1] The Wichita metropolitan consists of Sedgwick, Butler, Harvey, Kingman, and Sumner counties.