Kansas Employment Forecasts

2024 Statewide Employment Forecast
January Update

Foreword by the Director

Over the past several decades, the Kansas economy has demonstrated remarkable resilience in the face of major disruptions, including the Great Recession (2008–2009), the COVID-19 pandemic (2020), and recent significant inflationary pressures. In each case, economic downturns in Kansas have tended to be milder and shorter-lived compared to the rest of the nation.

Since the pandemic, Kansas has experienced a strong recovery, with many indicators returning to their long-term growth trajectories such as employment and production in non-durable manufacturing and natural resource production.  While inflation has posed challenges in recent years, inflation-adjusted personal income continues to rise alongside employment. Several industries in Kansas remain on steady long-term growth paths and are well-positioned for continued expansion.
As we look ahead to 2025, however, uncertainties loom. Policy changes promised by the upcoming federal administration could have widespread economic impacts. While inflationary pressures have eased somewhat, many businesses are still grappling with higher operating costs, and families are adjusting to elevated costs of living. Additionally, rapid advancements in technology and automation are driving significant shifts in industries, adding uncertainty to the future nature of work.
Despite these challenges, I have every confidence in Kansas's resilience and determination. The state has repeatedly shown its ability to adapt and emerge stronger from adversity, and I have no doubt that it will continue to do so in the years ahead.

Bekah Selby-Leach, Ph.D. 
Director, Center for Economic Development and Business Research

Statewide Employment Forecast

Since the pandemic, overall employment in Kansas has been steadily rising. Between 2014 and 2019, employment grew by 2.3%, averaging a 0.5% annual increase. Following the pandemic, recovery brought significant gains, with employment rising by 7.33% from 2020 to 2024. However, this rapid growth has begun to slow as the state returns to its long-term growth trajectory. The employment growth rate is expected to continue to decelerate, eventually stabilizing at levels similar to the pre-pandemic growth rates.

Statewide Industry Employment Forecasts

While the overall employment change is expected to be positive, the impact within industry is mixed. In this section, we discuss our predictions for employment growth by industry.  

•    Raw Materials Extraction and Construction: 0.2% 
Employment trends in this sector have remained relatively stable in Kansas and proved largely resistant to the effects of the pandemic.

•    Durable Goods Manufacturing: -1.9
Several factors, including increased automation, shifts in worker satisfaction, and changes in immigration policies, are expected to exert downward pressure on employment in this sector.

•    Non-Durable Goods Manufacturing: 1.4%
This sector has experienced significant employment growth in recent years, with the potential for continued increases if current trends persist. However, signs of production consolidation—such as the closure of Tyson's facility in Emporia and layoffs at AgCo in Hesston—indicate uneven impacts across the state. Consolidation efforts will likely result in employment gains for major plants but declines in areas affected by closures.

•    This includes wholesale and retail trade, warehousing, transportation, and utilities employment.
•    This super-sector has increased steadily since 2014, and we expect the upward trend to continue.  

•    Services, generally, are expected to increase year-over-year for 2025 and 2026, largely driven by increases in employment in private healthcare and financial activities (especially financial advising) as well as leisure and hospitality.  
•    However, there are expected decreases in information services (especially newspaper/periodical publishing and telecommunication carriers). 

•    Government employment has been among the most stable in the Kansas economy since 2014 for all other super-sectors. 
•    Historically, state government hospitals and federal civilian employment have experienced the greatest growth; however, more recent increases have been observed in both local and state government employment.

Regional Industry Employment Forecasts- Wichita MSA

Employment in Wichita has been steadily increasing across several sectors, including resource extraction, non-durable manufacturing, trade and transportation, financial activities, private healthcare and education, and other services. Conversely, the information sector has experienced a consistent decline over the past decade, a trend that is expected to persist.

Topeka has experienced significant employment growth in the non-durable manufacturing sector, as well as in private education and health services. Most other sectors in the area also show signs of near-term growth, with the exceptions of natural resource extraction and leisure and hospitality.

The Kansas City metro area has experienced significant employment growth over the past two decades, a trend that is expected to continue in the coming years. Strong growth has been observed in sectors such as natural resource extraction, non-durable manufacturing, trade and transportation, private education and health services, and other services, .

Although the financial activities sector declined for several years, it now shows signs of near-future recovery and growth. In contrast, employment in the information and professional services sectors has remained stagnant.

Unemployment and Labor Force Participation Rate Forecast

Definitions
•    Unemployment Rate: The percentage of working-age, civilian, non-institutionalized individuals who are actively searching for work and are currently not employed for pay.
•    Labor Force Participation Rate: The percentage of the working-age, civilian, non-institutionalized population that either is employed or actively searching for work. 

Unemployment Rate Forecast

The unemployment rate has been consistently low following the pandemic, though there has been some indication of an increase throughout 2024. Overall unemployment will likely rise in upcoming years, though there is tremendous uncertainty about the upcoming change in the federal administration and the impact of the policies they recommend. 

Layoffs and closures, particularly in manufacturing plants across the state, suggest potential structural shifts within the sector. These changes could result in longer-term unemployment as displaced workers undergo reskilling, potentially keeping the unemployment rate elevated for a longer period than anticipated.

Metropolitan areas such as Lawrence, Manhattan, Topeka, Wichita, and Kansas City are expected to have similar unemployment rates. However, regions with a higher concentration of their labor force in manufacturing are more vulnerable to the uncertainties stemming from these structural changes.

Labor Force Participation Rate Forecast

The national labor force participation rate has been declining since the early 2000s. In Kansas, however, this decline began slightly later, following the end of the 2008-2009 recession. Since then, the state's seasonally adjusted participation rate has dropped from 71.5% to approximately 66.5%.

We anticipate this downward trend to persist in the long term; however, over the next few years, significant changes in the participation rate are unlikely, with any shift expected to be within a few fractions of a percentage point.
The decline in labor force participation has been extensively studied by economists, yet no single cause has been identified. Instead, several contributing factors are widely believed to play key roles:

1.    Retirement of the Baby Boom generation: As members of this generation reach retirement age, many are choosing to leave the workforce, directly reducing the labor force participation rate.
2.    Rising school enrollment rates: Higher enrollment among young people, as they prioritize education over part-time or full-time work, reduces their presence in the labor force.
3.    Health and disability challenges: Increasing prevalence of chronic health conditions and disabilities has made employment more difficult for a significant portion of the population.
4.    Impact of social benefits: Changes in social programs, such as Social Security and disability insurance, provide individuals with greater financial flexibility, which may influence decisions to enter or remain in the workforce.

Real Gross Domestic Product Forecast

Definition
•    Real Gross Domestic Product: The total value of final goods and services produced from Kansas businesses (excludes goods and services sold as inputs along the supply chain). This value is then adjusted for inflation. 

Statewide GDP Forecast
The inflation-adjusted value of goods and services sold in Kansas steadily increased from 2005 to 2023. In the absence of any major production interruptions, this value is likely to continue expanding at a similar rate into the next year. 

We analyzed the data over the last twenty years and created a forecast of quarterly GDP through 2026 Q4. Following long-term growth patterns, we predict notable growth in non-durable goods manufacturing, health care, retail trade, and professional/administrative/management services. However, manufacturing is uncertain over the upcoming years due to automatio, labor issues, the lingering impact of supply-chain complications in aerospace manufacturing, and immigration/trade policies.  

Many of the industries in Kansas are not poised for substantial growth, but only a few indicate a potential decline. Notable among these are natural resource extraction and durable goods manufacturing. Natural resource extraction may yet turn around, however, with changing political focus and initiatives that favor growth in this area.  

Real Personal Income Forecast

Definition
•    Real Personal Income: Inflation-adjusted total income from employment compensation, self-employment, rentals, dividends, interest-bearing accounts, government or business transfers (such as social security benefits), and personal transfers (such as insurance settlements). It does not include unrealized capital gains or income taxes. 
•    Real Personal Income per Capita: Real Personal Income divided by population.

Statewide Income Forecast
In Kansas, inflation-adjusted income and income per capita have increased considerably from 1969 to 2023. Real personal income has increased by an average of 2.1% each year, leading to a cumulative growth of 15% in the last decade. 

Regional Real Income Forecasts

Among the major metropolitan areas in Kansas, Kansas City has shown the greatest growth in real income year-over-year, followed by Topeka and Wichita, respectively. 

Kansas City and Wichita both have per capita income growth rates that are less than overall income due to historically having higher population growth rates than Topeka. 

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