Kansas Employment Forecast

Released October 8, 2020  (See previous version)

Total employment in Kansas increased to 1,423,200 workers in 2019, with 0.5 percent growth, as unemployment declined 3.2 percent, its lowest level since 1978.  Nine consecutive years of declines in unemployment ended in the second quarter of 2020, as employment fell 8 percent in the second quarter of 2020.  This was the single largest one-quarter drop in state history, with a reduction in employment of more than 113,000 workers.  The unemployment rate rose from 2.9 percent in March 2020 to 11.9 percent in April 2020.  Unemployment declined to 7.2 percent in June, a rate still as high as the peak unemployment rate from the 2009 recession in Kansas.

Employment is expected to partially recover in the third and fourth quarters of 2020, but overall employment is projected to decline 4.1 percent, a loss of more than 58,000 compared to 2019.  In 2021, the state’s economic uncertainty remains high due to the rapidly shifting macroeconomy conditions and new developments with the novel coronavirus.  Kansas’ recovery is forecast to continue in 2021 with an expected average increase of 0.5 percent.  If the national economy improves in the upper range of expectations, Kansas’ growth would be projected to increase to 1.3 percent.  If national economic expansion is sluggish, or additional outbreaks of the novel coronavirus occur, Kansas may experience flat change in employment in 2021 or even modest job losses.

• Employment in the production sectors is forecast to grow 0.2 percent due to increases in the construction sector being partially offset by losses in manufacturing.  The construction sector is projected to add 1,300 jobs, as demand for housing is expected to remain robust.  Manufacturing sector employment is forecast to trend differently between durable and nondurable goods.  With softness in aerospace demand forecast to continue for the foreseeable future, durable goods employment is projected to decline by more than 1,600 workers.  Demand for nondurable goods was much less affected by the recession, and employment is projected to grow by 800 workers.
• Employment in the trade, transportation and utilities sector is projected to grow 0.8 percent.  Retail trade is expected to lead job gains in 2021 with more than 1,500 workers, though it is projected to remain more than 2,000 workers below 2019 levels.  The transportation and utilities sector is forecast to continue to grow beyond 2019 levels as Kansas’ distribution hubs grow, while the wholesale trade sector is expected to decline modestly.
• The service sector was the hardest hit by the recession and is expected to contract by approximately 41,300 workers in 2020.  It is also expected to recover most rapidly in 2021, adding more than 7,000 workers, but every service sector is projected to have 2021 employment at a lower level than in 2019.  The bulk of these gains are projected to be in the leisure and hospitality sector, which is forecast to decline 13.9 percent in 2020 and grow 4.8 percent in 2021.  The information sector is the only service sector projected to continue to decline in employment, losing an additional 1,300 jobs in 2021. 
• The government sector is projected to decline by approximately 2,700 workers, a contraction of 1.1 percent.  The job losses are forecast to be primarily in the local government sector, which is likely to suffer from budget shortfalls in 2021 due to a decline in retail spending and other revenue sources in 2020.

Kansas City Employment Forecast

Released  October 8, 2020 (See previous version)

Total employment in the Kansas City, MO-KS, metropolitan area increased by 8,500 workers in 2019, growing 0.8 percent, for the area’s ninth consecutive year of employment growth.  The unemployment rate declined to 3.3 percent, the area’s lowest since 1999.  In the second quarter of 2020, employment decreased by 99,600 workers, a decline of 9 percent, while unemployment grew from 3.2 percent in March 2020 to 11.7 percent in April.  The unemployment rate dropped to 7.1 percent by July 2020, which is approximately 2 percentage points lower than its 2009 recessionary peak.

Employment began to recover starting in May 2020, and this is expected to continue for the remainder of the year and into 2021.  For 2020, average employment is projected to 4.3 percent lower than its 2019 level, a contraction of 47,000 workers.  In 2021, the Kansas City economy is projected to recover almost a third of that contraction, adding more than 14,500 workers and growing 1.4 percent.  This forecast depends on both the national economy and novel coronavirus outbreak continuing to improve at its expected pace.  If the national economy nears the lower range of expectations, the forecast for Kansas City employment would be halved to 0.7 percent growth, while upper range national economy growth could lead to employment growth of 2 percent or more.

• The production sectors are projected to grow 1.2 percent in 2021, reaching their 2019 level of employment.  The sectoral mix is expected to shift modestly, with growth concentrated on the construction side, which is forecast to grow 2.3 percent and add more than 1,200 jobs.  The manufacturing sector is projected to add more than 200 jobs after contracting by more than 3,000 jobs lost in 2020.
• Trade, transportation and utilities sector employment is projected to increase by 1.6 percent, adding 3,400 jobs and recovering approximately two-thirds of the jobs lost in 2020.  Growth is expected to be broad based for the sector, with all three subsectors growing between 1.3 and 1.8 percent.  The wholesale trade and transportation sectors are projected to fully recover their 2020 losses, while the retail trade sector is expected to remain 1,500 workers below its 2019 peak.
• The service sectors are expected to continue a slow recovery in 2021, expanding by 1.8 percent after declining by 6.8 percent in 2020.  The recovery is forecast to be led by the lesiure and hospitality sector, which is expected to add more than 5,300 jobs and grow 5.9 percent.  The professional and business services sector and the education and health sector are each projected to add more than 2,000 jobs.  The information sector is expected to be a drag on service growth with a projected contraction of more than 1,100 workers.
• The government sector is projected to decline by 0.4 percent, with the contraction primarily focused at the local and federal levels, each of which are projected to decline by approximately 300 jobs.
   

*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 October 8, 2020 (See previous version)

Employment in the Wichita metropolitan area grew 1.8 percent to 305,100 workers in 2019 while the unemployment rate declined to a twenty-year low of 3.4 percent.  With the outbreak of the novel coronavirus in April 2020, unemployment spiked to 17.7 percent and more than 27,000 workers in the second quarter.  The unemployment rate declined to 10.9 percent in July 2020, still 0.7 percent higher than the highest level recorded prior to 2020. 

The economic recovery is expected to continue in the second half of 2020, with 2020 employment projected to be 4.5 percent and 13,600 jobs lower than it was in 2019.  Growth is anticipated to continue in 2021, but at a slower rate, with more than 1,100 jobs added.  This represents the average of a wide range of possible economic outcomes due to the high economic uncertainty caused by the continuing coronavirus outbreak.  If the national economy recovers at a rate on the high end of expectations, Wichita’s employment is forecast to grow 1.3 percent.  If the national economy performs at the lower end of expectations, Wichita’s employment is likely to continue to contract modestly.  In each of these cases, 2021 employment is projected to be lower than 2019 employment. It is expected that the economy will take years to fully recover from the economic effects of novel coronavirus outbreak.

• Production sector employment is expected to decline 0.8 percent as growth in the construction industry is outweighed by declines in manufacturing employment.  Wichita’s manufacturing sector is projected to contract by 1.6 percent, with the losses concentrated in the durable goods sector.  Due to Wichita’s concentration in aerospace manufacturing, along with uncertainty from the Boeing 737 Max production freeze and low levels of air traffic from the novel coronavirus, Wichita will likely lag the national recovery for durable goods manufacturing.
• Employment in the trade, transportation and utilities sector is forecast to grow 2.2 percent in 2021, following a 2.5 percent drop in 2020.  The largest gains are expected in the retail trade industry, which is projected to recover 700 of 1,200 jobs lost in 2020.  Retail employment is expected to be buoyed by real taxable retail sales growth of 2.1 percent in the area, largely offsetting the 2.3 percent decline in sales in 2020.  The transportation and utilities sector is projected to expand 2.6 percent, exceeding its 2019 and 2020 employment levels.
• The service sector is expected to grow 0.5 percent, with large growth in the leisure and hospitality sector and the education and health services sector partially offset by continued job losses in the professional and business services sector and the information sector.  The leisure and hospitality sector is forecast to lead job gains, recovering almost 1,000 of the 4,000 jobs lost in 2020 and growing 3.3 percent.  Given the expected continued weakness in the manufacturing sector, professional and business services are expected to contract by more than 500 jobs, in addition to the more than 500 jobs lost in 2020.
• The government sector is forecast to decline by 0.3 percent, losing more than 100 jobs. The bulk of the job losses in the local government sector, which includes municipal and county governments as well as local school districts.

Topeka Employment Forecast

Released October 8, 2020 (See previous version)

The Topeka metropolitan area’s employment decreased by 400 workers in 2019, a 0.4 percent decline.  This was the area’s third consecutive year without an increase in employment.  Despite the employment decline, the unemployment rate continued to fall in the area, to 3.3 percent.  In the second quarter of 2020, employment declined by 7,900 workers, a 7.1 percent decrease.  The unemployment rate spiked in April 2020 to 11.7 percent, followed by a drop to 6.9 percent in July, which remains near the area’s 2010 recessionary unemployment peak.

The economy began adding jobs back in May 2020, and this recovery is projected to continue at a slowing rate through the second half of 2020.  The average employment for 2020 is projected to be 4.4 percent lower than the area’s 2019 level.  In 2021 the recovery is expected to continue to slow, with the area forecast to expand by 0.1 percent.  If the national economy underperforms relative to expectations, it is likely that employment will decline, with a projected lower range contraction of 0.6 percent.  A faster national recovery in the upper range of expectations would boost the expected Topeka area growth to 0.9 percent.

• The goods producing sectors are projected to remain flat after contracting by fewer than 500 jobs in 2020.  The job losses, both in 2020 and 2021, are expected to be concentrated in the construction sector, which is expected to contract by 2.3 percent in 2021.  The manufacturing sector, after remaining relatively flat in 2020, is forecast to gain more than 100 jobs and grow 1.3 percent.
• The trade, transportation, and utilities sector is expected to decline by fewer than 50 jobs in 2021 after projected losses of approximately 500 workers in 2020.  The wholesale trade sector is forecasted to decrease by 2 percent, while the retail trade sector is expected to grow 0.3 percent after a 5.2 percent contraction in 2020.  The transportation and utilities sector, which had grown strongly in 2018 and 2019 and was largely unaffected by the novel coronavirus outbreak, is expected to contract 0.5 percent in 2021.
• The service sector is projected to grow 1.2 percent after a 5.2 percent in 2020.  The growth in services is forecast to be led by the leisure and hospitality sector, which is projected to expand 3.6 percent.  The other services sector, which includes repair shops and personal care shops, is expected to grow 2.6 percent.  The information sector is the only service sector projected to lose jobs, with a forecasted job loss of fewer than 100 jobs.
• Employment in the government sector is forecast to contract by 1.7 percent, a decline of more than 400 jobs.  The local, state, and federal levels of government are each expected to contract by more than 100 jobs.

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