Kansas Employment Forecast
In 2020, average annual employment contracted by 4.6 percent relative to 2019. The sharpest decline was in the second quarter of 2020 with the onset of the novel coronavirus pandemic when employment decreased by 8.8 percent compared to the second quarter of 2020. More than 127,000 jobs were lost in the second quarter, but the economy began to rebound in the third quarter, recovering 53,300 jobs. That recovery has continued through the first half of 2021 as well, adding back an additional 19,500 jobs to the state economy in the last three quarters. Unemployment peaked at 12.6 percent in April 2020 but declined and remained below 4 percent by February 2021.
Employment growth is projected to continue in 2022 with the forecasted addition of 13,401 new jobs and a gain of 1 percent. Growth is expected to be the fastest in the first quarter of the year before leveling off in the second half. Though the economy will likely be more stable than in 2020, economic uncertainty remains elevated relative to pre-pandemic levels, with the possibility for additional spikes in novel coronavirus cases to potentially put a damper on the recovery and expansion. Tightness in both supply chains and labor markets could lead to minor disruptions having outsized effects on economic growth.
- Employment in the production sectors is projected to increase 1 percent, adding more than 2,300 jobs in the state. The construction sector is expected to have the highest growth in employment, expanding 1.9 percent as demand for housing continues to increase. The manufacturing industry is forecast to grow more modestly with an increase of 0.4 percent in the durable goods sector as the aerospace sector begins to recover from a difficult recession due to the curtailing of flights in 2020 caused by the novel coronavirus pandemic. The nondurable goods sector is expected to grow 0.9 percent after experiencing continued growth during the pandemic.
- Trade, transportation, and utilities sector employment is forecast to expand 0.8 percent, increasing by more than 22,00 jobs. The fastest growth is expected in the transportation and utilities sector, at 2.6 percent, as Kansas continues to grow as a logistics hub for the Midwest. The retail trade sector is projected to increase by 0.1 percent, following a forecasted 3.7 percent growth rate in 2021, bringing the industry close to pre-pandemic employment levels. The wholesale trade sector is expected to expand by 0.3 percent.
- The service sectors are projected to account for 62.8 percent of all job growth in Kansas in 2022, adding more than 8,400 jobs and expanding 1.3 percent. The leisure and hospitality sector was the hardest hit in 2020, contracting by 15 percent, and is expected to be the fastest-growing sector in 2021 and 2022, expanding 5 percent and 3.7 percent, respectively. The education and health services sector is forecast to gain almost 2,300 jobs, while professional and business services are projected to add more than 1,000.
- Government sector employment is expected to recover modestly after decreasing in both 2020 and 2021, adding back more than 400 jobs in 2022. Most of these jobs are expected to be added at the local level, while state and federal employment are forecast to remain relatively flat.
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