Kansas Employment Forecast

Released May 3, 2021  (See previous version)

Annual average employment in Kansas in 2020 contracted by 4.6 percent relative to the 2019 average, but looking at only the average values masks the large swings in employment throughout the year in the aftermath of the novel coronavirus outbreak.  From the first quarter of 2020, when the outbreak began, to the second quarter, almost 120,000 jobs were lost in the state.  For the rest of 2020 and the first quarter of 2021, employment grew in the state, recovering more than 60,000 jobs, approximately half of what was lost in the second quarter.  Unemployment grew from 3.2 percent in the first quarter of 2020 to 12.6 percent in April 2020.  The rate continued to decline the rest of the year and reached 3.6 percent in the first quarter of 2021. 

Employment is expected to continue to grow throughout the rest of 2021, expanding 2.2 percent from the fourth quarter of 2020 to the fourth quarter of 2021.  Growth is expected to be the fastest in the third quarter of the year, when the vaccinations are projected to reach a high enough level that social distancing restrictions will likely further be relaxed.  The Kansas economy remains especially vulnerable to disruptions and downside risks during this recovery period due to tight supply chains, tight labor markets, and possibilities of additional lockdowns or distancing restrictions from virus mutations.

• Kansas production sector employment is forecast to grow 2.4 percent from the fourth quarter of 2020 to the fourth quarter of 2021 after declining 5.3 percent in 2020. The construction sector is projected to lead growth at 2.9 percent and exceed its pre-pandemic peak by the fourth quarter of 2021.  Both the durable and nondurable goods manufacturing sectors are expected to grow approximately 2 percent by the fourth quarter, though the durable goods sector will remain substantially below its pre-pandemic peak due to losing more than 15,000 jobs at the start of the novel coronavirus outbreak.
• Employment in the trade, transportation, and utilities sector is projected to grow 2.6 percent from the fourth quarter of 2020 to the fourth quarter of 2021. Retail sales are expected to grow 1.8 percent throughout the year in the state, relative to 2020, driving an increase in retail employment.  The transportation and utilities sector is forecast to be the fastest-growing subsector as Kansas continues to expand as a Midwestern transportation and logistics hub, expanding 5.1 percent from the fourth quarter of 2020 to the fourth quarter of 2021.
• The service sector is expected to have the most significant employment expansion in Kansas, growing 2.8 percent. The sector was the hardest hit in 2020, declining 5.6 percent.  The leisure and hospitality sector suffered the largest contraction, losing almost 30 percent of its employment in the second quarter of 2020.  The industry is forecast to be the fastest-growing sector in 2021, increasing 6.7 percent from the fourth quarter of 2020 to the fourth quarter of 2021, though still remaining more than 12,000 jobs below its pre-pandemic peak.  The professional and business services sector is also projected to grow rapidly in 2021, recovering almost all the jobs lost in 2020 and reaching within 2,000 jobs of its pre-pandemic peak.
• The government sector is forecast to remain relatively flat in 2021, growing 0.1 percent from the fourth quarter of 2020 to the fourth quarter of 2021, after contracting by 3.3 percent in 2020. State government employment is projected to have the fastest growth, at 0.6 percent.

Kansas City Employment Forecast

Released  May 3, 2021 (See previous version)

Total employment in the Kansas City, MO-KS, metropolitan area^[1] contracted 4.3 percent in 2020, a loss of more than 47,000 workers.  From the first quarter to the second quarter of 2020, more than 100,000 jobs were lost with the onset of the novel coronavirus pandemic.  The economy added back almost 50,000 jobs in the third and fourth quarters of 2020 as the recovery from the coronavirus recession began.  The unemployment rate for the Kansas City area rose more than 10 percentage points from its pre-pandemic low to peak at 13.2 percent in April 2020 before declining to 4.2 percent in March 2021.

The recovery is projected to continue throughout 2021, with employment forecast to grow 2.5 percent from the fourth quarter of 2020 to the fourth quarter of 2021.   By the end of 2021, more than three-quarters of the jobs lost due to the novel coronavirus pandemic are expected to have been regained in the Kansas City area as growth continues.  There is still an elevated level of uncertainty in the economy from national and international factors, and downside risks, such as supply chain disruptions or novel coronavirus mutations, could mute growth or return the economy to recession.

• Production sector employment is projected to increase 2 percent from the fourth quarter of 2020 to the fourth quarter of 2021. The construction sector is forecast to lead growth with an expansion of 2.4 percent, gaining back almost all of the jobs lost in 2020.  The manufacturing industry is projected to grow 1.8 percent by the fourth quarter of 2021, within 2,000 jobs of its pre-pandemic peak.
• Employment in the trade, transportation, and utilities sector is forecast to increase 2.5 percent from the fourth quarter of 2020 to the fourth quarter of 2021. The retail trade sector is projected to increase employment by more than 1.7 percent on the strength of real taxable retail sales growth of 2.6 percent.  The transportation and utilities sector is projected to lead growth with a 4.3 percent expansion as Kansas City’s logistics hub continues to develop.
• The service sector is projected to increase its employment by 3.2 percent, the fastest of any sectoral group in Kansas City, from the fourth quarter of 2020 to the fourth quarter of 2021. Leisure and hospitality employment is forecast to grow 12.2 percent by the fourth quarter of 2021, following a 35 percent decline in employment in the second quarter of 2020.  The professional and business services sector is forecast to expand 4.4 percent and be the only Kansas City service sector to exceed its pre-pandemic peak by the end of 2021.
• The government sector is expected to remain relatively flat in 2021, growing only 0.2 percent from the fourth quarter of 2020 to the fourth quarter of 2021. The local government sector is forecast to be the fastest-growing, expanding 0.7 percent by the fourth quarter.

[1] The Kansas City, MO-KS, metropolitan area includes Bates, Caldwell, Cass, Clay, Clinton, Jackson, Lafayette, Platte and Ray counties in Missouri and Johnson, Leavenworth, Linn, Miami, and Wyandotte counties in Kansas.

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.

Topeka Employment Forecast

Released May 3, 2021 (See previous version)

The Topeka metropolitan area’s^[1] employment contracted by 3.9 percent in 2020, a decline of more than 4,300 workers.  The most significant loss was in the second quarter, due to the novel coronavirus outbreak when employment declined by 8,000 workers.  Employment grew in the third quarter of 2020 and the first quarter of 2021, regaining more than 4,000 of those jobs lost in the second quarter, but remaining almost 4,000 jobs below the area’s pre-pandemic employment peak.  The unemployment rate rose sharply in the second quarter, increasing more than nine percentage points to a peak of 12.4 percent in April 2020.  By March 2021, the unemployment rate declined to 3.5 percent.

Topeka’s recovery is forecast to continue in 2021, with employment in the fourth quarter of 2021 projected to be 1.8 percent higher than employment in the fourth quarter of 2020.   The area is projected to recover more than 5,200 of the 8,000 jobs lost in the second quarter of 2020 by the end of the fourth quarter of 2021.  Downside risks and uncertainty remain accentuated during the recovery period, such as supply chain disruptions and further lockdowns and social distancing brought on by mutations of the novel coronavirus.

• • Production sector employment is expected to increase 2.5 percent from the fourth quarter of 2020 to the fourth quarter of 2021. The manufacturing sector is forecast to add more than 200 jobs, expanding 2.6 percent, while the construction sector is projected to add more than 100 jobs, growing 2.3 percent.
  • Employment in the trade, transportation, and utilities sector is forecast to grow 1.1 percent from the fourth quarter of 2020 to the fourth quarter of 2021. The retail trade sector is projected to grow the fastest, at 1.9 percent, and by fewer than 100 jobs below its pre-pandemic peak by the fourth quarter of 2021.  The transportation and utilities sector is expected to grow by 0.6 percent throughout 2021.
  • Service sector employment is projected to grow 1.5 percent from the fourth quarter of 2020 to the fourth quarter of 2021, adding approximately 800 jobs to the local economy. The leisure and hospitality sector is forecast to have the fastest growth among Topeka’s area’s service sectors in 2021, expanding more than 9.3 percent by the fourth quarter, following a contraction of 28.5 percent in the second quarter of 2020.  The health care sector is projected to increase by 1.2 percent, recovering almost all of the jobs it lost in the pandemic recession.
  • Topeka’s government sector is expected to expand 2.3 percent from the fourth quarter of 2020 to the fourth quarter of 2021. The local government sector is projected to be the fastest-growing government sector, adding more than 400 new jobs and growing 3 percent.

   

  [1] The Topeka metropolitan area consists of Jackson, Jefferson, Osage, Shawnee, and Wabaunsee counties in Kansas.