Kansas Employment Forecast
2023 Kansas Employment Forecast
Winter Update
Uncertainty about an economic recession and inflation expectations has plagued the U.S. economy in 2022. The Bureau of Economic Analysis's preliminary estimates of Gross Domestic Product indicated significant declines, which sparked concerns about a recession. Those estimates have been revised upward but still, show losses. The third quarter estimates, however, have a significant rebound in the economy of 3.2%. An alternative measure of the economy that the Center has recently followed more closely is Gross Domestic Income (GDI). It too has a small decline in the first half of the year with a strong rebound in the third quarter. Based on these two estimates, the U.S. economy was on shaky ground in the first half of 2022 as it dealt with the fallout of the Russian invasion, increased energy prices, and residual COVID effects.
Unlike the nation, Kansas's economy grew in the first quarter of 2022 by 2.6% at an annualized rate due to agriculture, manufacturing, and management of companies. The state declined in the second quarter and rebounded in the third quarter with an annualized growth rate of 1.9%. Agriculture and manufacturing remain the stabilizing forces in Kansas.
In 2021, Kansas' employment grew by 1.1%, adding over 14,717 jobs, which is considered strong growth. In the first half of 2022, however, Kansas added 17,400 jobs as firms fiercely competed for labor. As a result of the tightening labor market and the deliberate slowdown of the U.S., the Center's forecast is for employment growth to slow down to 0.6% in 2023.
The majority of expected growth for Kansas in 2023 is within the production sectors, increasing 1.3% and adding 3,220 jobs. The natural resources, mining, and construction sector is projected to have the second-highest growth in employment, expanding by 1.2%. The durables manufacturing industry is forecast to grow the fastest with 2.2%, which is driven by the aerospace industry and multiple plant locations and expansions. Non-durable manufacturing is expected to moderate in 2023 and 2024 after several years of robust growth.
Trade, transportation, and utility employment are forecast to expand 0.3%, increasing by 545 jobs. The slowing growth within this industry is driven primarily by the persistent inflation eroding household purchasing power and its effects on the retail subsector. The transportation, warehousing, and logistics portion of the industry had mixed market conditions. Within Kansas, the sub-sector expanded but had several setbacks to global supply chain issues.
The service sectors are projected to account for 42% of all job growth in Kansas in 2023, adding more than 3,700 jobs and increasing by 0.6%. Professional and business services are expected to rise the most within the services industry, with 1.5% in 2023 and 1.6% in 2024. On the other hand, financial activities are anticipated to decline by 3.1% in 2022 as the sector struggles to retain employees within the tight labor market.
The household labor market conditions remain robust as employers continue adding jobs throughout 2022. Labor force is anticipated to expand by 0.3% in 2023 as firms continue to post more job openings. The growth will put further pressure on the market and will likely decrease unemployment over the next two years.
The value of production of all goods and services within Kansas increased by 2.9% in 2021. Although there was a second-quarter decline, the state is expected to continue its recovery with a total growth of 2.4% in 2022. The growth momentum is expected to continue in the following two years, with an increase of 2.2% and 2.6%. Growth sectors include manufacturing, mining, transportation, and management of companies.
| Kansas GDP by Industry* | |||||
| 2020 (a) | 2021 (a) | 2022 (f ) | 2023 (f) | 2024 (f) | |
| All industry total | -0.9% | 2.9% | 2.4% | 2.2% | 2.6% |
| Private industries | -0.6% | 3.2% | 2.8% | 2.3% | 2.9% |
| Agriculture, forestry, fishing and hunting | 6.7% | -8.8% | 6.5% | 0.9% | 1.4% |
| Mining, quarrying, and oil and gas extraction | 22.8% | -15.5% | -1.5% | 2.2% | 17.2% |
| Utilities | 2.2% | -7.0% | -3.4% | -0.4% | 1.2% |
| Construction | -1.9% | 0.6% | -11.8% | -0.7% | -0.2% |
| Manufacturing | -4.5% | 4.9% | 3.8% | 4.5% | 6.6% |
| Durable goods manufacturing | -8.6% | 8.1% | 5.3% | 7.0% | 11.0% |
| Nondurable goods manufacturing | -0.2% | 1.8% | 2.2% | 1.8% | 1.9% |
| Wholesale trade | -2.0% | 2.3% | -0.6% | 0.8% | 0.9% |
| Retail trade | -2.8% | 0.6% | -0.6% | 1.6% | 0.8% |
| Transportation and warehousing | -2.5% | 1.9% | -1.7% | 7.2% | 2.4% |
| Information | 52.5% | 7.3% | 10.0% | 0.7% | 1.1% |
| Finance and insurance | 10.1% | 6.2% | -6.7% | 2.4% | 1.9% |
| Real estate and rental and leasing | -5.9% | 0.0% | 0.0% | 2.6% | 2.6% |
| Professional, scientific, and technical services | 0.3% | 5.8% | 6.5% | 2.9% | 2.7% |
| Management of companies and enterprises | -2.6% | -7.8% | 35.8% | 3.8% | 4.0% |
| Administrative and support and waste management and remediation services | -4.0% | 13.1% | 11.2% | 1.4% | 1.6% |
| Educational services | -14.7% | 5.1% | -6.2% | 0.2% | -0.1% |
| Health care and social assistance | 2.8% | 1.8% | 2.8% | 0.5% | 1.6% |
| Arts, entertainment, and recreation | -38.7% | 28.1% | 7.5% | 4.0% | 1.7% |
| Accommodation and food services | -14.7% | 21.2% | 3.7% | 2.6% | 2.7% |
| Other services (except government and government enterprises) | -7.3% | 3.9% | 3.2% | -0.2% | -0.7% |
| Government and government enterprises | -2.8% | 0.2% | -0.6% | 0.7% | 0.4% |
| Federal civilian | 2.4% | -5.8% | -3.8% | -0.9% | 0.0% |
| Military | 2.2% | 4.0% | -3.3% | 0.8% | 0.4% |
| State and local | -4.7% | 0.7% | 0.5% | 1.0% | 0.4% |
| *Annual values are derived from average quarterly observations and projections. (a) actual (e) estimated (f) forecasted Source: CEDBR, BEA |
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Kansas City Employment Forecast
2023 Kansas City Employment Forecast
Total employment in the Kansas City, Kansas metropolitan area[1] increased by just shy of 5,900 workers in 2021, a growth of 1.3%. In the first half of 2022, the regional economy added 5,575 as employers to all labor in efforts to meet the elevated demand.
The U.S. and global economic conditions were mirrored within the Kansas City area, with firms and households both concerned about inflation and a potential recession. As of November 2022, the regional market added 15,000 since January of the same year. Most of that growth was within the professional and business services sector, with 6,200 jobs.
The economy is forecast to increase by 0.8% in 2023, adding over 4,059 workers, which is a moderating growth rate due to the labor market approaching full employment and the tightening monetary policy. Although global and national market conditions are slowing, the Kansas City area is expected to have one of the strongest growths within the state. Further, the regional market is expected to see even stronger growth in 2024 after the inflation woes subside.
Employment in the production sectors is forecast to increase by 1.5%, led by the growth in the durables goods manufacturing sector. The durable goods sector is expected to add over 830 jobs in 2023 at an annual growth rate of 3.9%. Although this industry segment is facing broader macroeconomic pressures, the region is expected to continue its growth in both automotive and related activities. The non-durables manufacturing, natural resources, and construction subsectors are expected to have more moderate growth.
Trade, transportation, and utilities employment is expected to have flat growth in 2023. The transportation and utilities sector is forecast to be the fastest-growing sector, whereas the retail portion will slow. The slowing growth within the retail sectors is driven primarily by the persistent inflation eroding household purchasing power.
The service sectors are projected to add more than 2,566 jobs, growing 1.0%. The professional & business is projected to lead the growth in 2023. The slowest industry within this segment is the financial sector, which is anticipated to add 174 jobs over the next year.
The labor market conditions for households remain robust, as employers continued to add jobs in 2023 and are anticipated to expand by 1.0% in 2023. The growth will put further pressure on the market and ill likely decrease unemployment over the next two years.
[1] The Kansas City, Kansas metropolitan area portion includes Johnson, Leavenworth, Linn, Miami, and Wyandotte Counties.
Topeka Employment Forecast
2023 Topeka Employment Forecast
The Topeka metropolitan area’s[1] employment grew by 1,317 employees in 2021, an expansion of 1.2%. Unfortunately, Topeka did not experience the same employment growth seen across the nation or in Kansas in the first half of 2022. The market declined by 0.2%, accounting for a loss of 175 jobs. Most of that loss was within the first quarter, as the Topeka market had month-over-month growth through August 2022.
Although there are broad concerns within the national and global markets, the spillover effect from the more optimistic outlooks of manufacturing, agriculture, and energy will likely help bolster the Topeka Market in 2023. As a result, the employment outlook is for 0.3% growth next year and an acceleration of 0.5% in 2024.
The majority of growth within the production sector is expected to be within durable goods manufacturing, with an increase of 0.4%. The non-durables manufacturing sector, which has been expanding, is expected to cool off due to weakening demand and inflation. The natural resources, mining, and construction sector is expected to flat slightly in 2023, as home price appreciation and consumer sentiment will weigh on the construction sector.
Employment in the trade, transportation, and utilities is projected to decline by 0.5%, a loss of 87 jobs in 2023. Retail trade will likely make up most of that loss, which is due to changing consumer behavior and weakening purchasing power due to inflation. Transportation and utilities are forecast to slow down because of the broader economic conditions.
The service sectors are expected to account for almost all of the growth in 2023, adding just under 323 jobs. The driver for the increase stems from the shift from latent growth in financial and health services and the changing consumer behaviors. Leisure & hospitality account for the later shift, as consumers are spending less on retail and dining out more. The information sector, which is an agglomeration of news, data hosting, telecommunication, and publishing industries, is expected to decline by 0.6%, accounting for a loss of 5 jobs.
The labor market conditions for households remain robust, as employers continued to add jobs in 2023, and is anticipated to expand by 0.3% in 2023. The growth will put further pressure on the market and will likely decrease unemployment over the next two years.
[1] The Topeka metropolitan area consists of Jackson, Jefferson, Osage, Shawnee, and Wabaunsee counties.
Wichita Employment Forecast
2023 Wichita Employment Forecast
Average annual employment in the Wichita metropolitan area[1] increased by 4,917 workers in 2021, a growth of 1.7%. In the first half of 2022, the regional economy added 5,325 as employers scrambled to add talent to the payroll.
While the U.S. and global economies were plagued with recession and inflation fears, the Wichita Economy had slightly more optimism. Current and expected growth within manufacturing led to increased employment and wages. As of November 2022, manufacturing added 2,600 jobs. The growth has spilled over into the services sectors, particularly within leisure and hospitality.
The Wichita area recovery is expected to moderate into 2023, as both tightening monetary policy and labor conditions will dampen the outlook. Although global and national market conditions are slowing, the Wichita metropolitan area is expected to have one of the most robust growths within the state, adding 2,900 jobs at an annualized increase of 1.0%. That same growth is also projected to continue into 2024.
The production sectors are forecast to increase in employment by 2.2% with the addition of more than 1,455 workers. The durable goods manufacturing sector is projected to lead the growth, adding 1,142 jobs, as the aerospace industry continues its growth momentum. Non-durable manufacturing is expected to have flat growth at 12 jobs. The natural resources and construction sector is projected to have minimal growth in 2023, as new housing demand is cooling off due to interest rates and home price appreciation.
Employment in the trade, transportation, and utilities sector is expected to increase by just fewer than 285 workers, growing 0.6%. The slowing growth within this industry is driven primarily by the persistent inflation eroding household purchasing power and its effects on the retail subsector.
The service sectors are expected to grow 0.5% and are projected to represent 24% of all area employment growth. The leisure and hospitality sector is expected to lead the growth adding over 238 jobs of the almost 693 service sector jobs created in Wichita in 2023. The professional and business services sector, which declined by 3.0% in 2022, is expected to rebound in 2023 by 0.4%. The financial activities sector, which often mirrors the broader economy, will likely grow by 0.7% over the next year.
The labor market conditions for households remain robust, as employers are anticipated to expand jobs by 1.0% in 2023. The growth will put further pressure on the market and will likely decrease unemployment over the next two years.
[1] The Wichita metropolitan area consists of Sedgwick, Butler, Harvey, and Sumner counties.