• Kansas
  • Wichita
  • Topeka
  • Kansas City

Released October 6, 2022  (See previous version)

According to the Bureau of Economic Analysis, the U.S. economy grew by 5.7% in 2021 after contracting 3.7% the prior year. The first half of 2022 registered two consecutive quarters of negative real GDP growth, prompting some reporters to declare a recession. Those declarations, however, might be premature. It is important to note that the National Bureau of Economic Research is the official entity to call a recession, which is always retroactive and includes other variables beyond GDP. Currently, there are mixed signals about the broader economic conditions. Market volatility, inflation, the housing market, and negative consumer sentiment contributed to economic pessimism. Alternatively, gross domestic income, employment, and retail sales have remained robust and appear to be a proverbial firewall to a recession.

In 2021, Kansas' employment grew by 1.1%, adding over 14,700 jobs. In the Center's more optimistic outlook, employment growth is projected to add 10,107 new jobs at a gain of 0.7% in 2022. The slowing growth expectations are due to the tightened monetary policy and the labor market approaching full employment. Because of the potential market correction, the Center has a lower bound forecast for the state of 0.0% in 2023 and 0.9% in 2024.

The majority of expected growth for Kansas in 2023 is within the production sectors, increasing 1.4% and adding 3,316 jobs. The natural resources, mining, and construction sector is projected to have the second-highest growth in employment, expanding by 1.3%. The durables manufacturing industry is forecast to grow the fastest with 1.9%, 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 850 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 55% of all job growth in Kansas in 2023, adding more than 5,600 jobs and increasing 0.9%. Within the services industry, professional and business services are expected to rise the most, with 1.5% in 2023 and 1.4% in 2024. On the other hand, financial activities are anticipated to decline by 2.7% 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 demand is anticipated to expand by 0.6% 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.

Due to unique market conditions increasing purchasing power in 2021, inflation-adjusted retail sales grew by 11.1%. However, in 2022, as the economy opened up after the global pandemic and consumption spending shifted from retail to service-related expenses like restaurants and entertainment. Furthermore, inflation eroded discretionary income, or after-tax pay, which slowed consumption for middle and lower-income households.

 

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Released October 6, 2022 (See previous version)

 

Average annual employment in the Wichita metropolitan area* increased by 4,917 workers in 2021, a growth of 1.7%. The global pandemic’s impact on the economy decreased jobs by 39,700 in April 2020. Since then, the region has added back 36,300 workers. In 2022, year-over-year growth was over 2% for the first two quarters, which is above the historical average growth rate.

The Wichita area recovery is expected to moderate the remainder of the year and 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 strongest growths within the state, adding 3,185 jobs at an annualized increase of 1.1%. Even the lower bound growth of 0.3% remains more robust than the flat growth at the state level and declining expectations in some of the other markets.

The production sectors are forecast to increase in employment by 1.7% with the addition of more than 1,155 workers. The durable goods manufacturing sector is projected to lead the growth, adding 1,169 jobs, as the aerospace industry continues its growth momentum. Non-durables manufacturing, however, is expected to decline by 56 jobs. The natural resources and construction sector is projected to have near-flat 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 240 workers, growing 0.5%. 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 0.8% and are projected to represent 35% of all area employment growth. The professional & business services sector is expected to lead the growth adding over 440 jobs of the almost 1,300 service sector jobs created in Wichita in 2023. The leisure and hospitality sector grew by 7.1% in 2022 due to the shifting demand from retail and market opening. However, that growth is projected to moderate in 2023, as inflation has depleted spending power.

 

The labor market conditions for households remain robust, as employers continued to add jobs in 2022 and are anticipated to expand by 1.1% in 2023. The growth will put further pressure on the market and will likely decrease unemployment over the next two years.

Inflation-adjusted taxable retail sales grew by 10.9% in 2021 and 1.7% in 2022, as market economic conditions led to increased purchasing power. In 2022, as the economy opened up after the global pandemic, consumption spending shifted from retail to service-related expenses like restaurants and entertainment.

 

* The Wichita metropolitan consists of Sedgwick, Butler, Harvey, Kingman, and Sumner counties.

 

 

  



 

 

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Topeka Employment Forecast

Released October 6, 2022 (See previous version)

The Topeka metropolitan area’s* employment grew by 1,317 employees in 2021, an expansion of 1.2%. The global pandemic’s impact on the economy decreased jobs by just under 9,900 in April 2020. Since then, the region has added back just under 9,100 workers. In 2022, year-over-year growth was over -0.2% for each of the first two quarters, which was counter to the broader macro trends.

Although the Topeka area declined in the first part of the year, the forecast is for the second half to pick up, creating a 0.3% annual growth rate. With the global and national headwinds, the forecasted employment growth for 2023 is expected to be between -0.5% to 0.2%. The more optimistic view holds a tightening monetary policy environment and slow growth. The negative growth factors in more global pressures, causing a dip in the national economy between 2022 and 2023.  

 

All growth within the production sector is expected to be within durable goods manufacturing, with an increase of 0.7%. 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 decline 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 1.6%, a loss of 282 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 390 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 2.7%, accounting for a loss of 21 jobs.

 

The labor market conditions for households remain robust, as employers continued to add jobs in 2022, 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.

 

Inflation-adjusted taxable retail sales grew by 8.8% in 2021 as market economic conditions led to increased purchasing power. In 2022, as the economy opened up after the global pandemic, consumption spending shifted from retail to service-related expenses like restaurants and entertainment. Retail sales are expected to pick up in 2023, increasing by 1.0%.

 

 *The Topeka metropolitan area consists of Jackson, Jefferson, Osage, Shawnee, and Wabaunsee counties.

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Kansas City Employment Forecast

Released  October 6, 2022 (See previous version)

Total employment in the Kansas City, Kansas metropolitan area* increased by just shy of 5,900 workers in 2021, a growth of 1.3%. The global pandemic’s impact on the economy decreased jobs by 51,000  jobs in April of 2020. Since then, the region has added back 54,300 workers. In 2022, the first two quarters had 2.2 and 1.9% annualized growth, representing a stronger growth year for the area.

The economy is forecast to increase by 1.1%, adding over 5,100 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. The lower bound growth rate for the Kansas City area is 0.3%, which remains stronger than the flat growth at the state level and the declining expectations in some of the other markets.

 

Employment in the production sectors is forecast to increase by 1.4%, led by the growth in the durables goods manufacturing sector. The durable goods sector is expected to add over 570 jobs in 2023 at an annual growth rate of 2.7%. 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 expand by 0.5%. 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 3,782 jobs, growing 1.5%. The professional & business and health services sectors both are projected to lead the growth in 2023, each increasing by 1.8%. 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 2022 and are anticipated to expand by 0.6% in 2023. The growth will put further pressure on the market and will likely decrease unemployment over the next two years.

Inflation-adjusted taxable retail sales grew by 13.3% in 2021 and 6.2% in 2022, as market economic conditions led to increased purchasing power. In 2022, as the economy opened up after the global pandemic, consumption spending shifted from retail to service-related expenses like restaurants and entertainment.

 

*The Kansas City, Kansas metropolitan area portion includes Johnson, Leavenworth, Linn, Miami, and Wyandotte Counties.

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