Kansas Employment Forecast

Released May 5, 2020  (See previous version)

Total nonfarm employment for the state of Kansas increased by almost 8,000 workers in 2019, growing 0.5 percent.  For 2020, the Kansas economy is projected to contract substantially due to the impact of the novel coronavirus, with the effects of the virus on the economy expected to linger on beyond the end of the state’s stay-at-home order as social distancing continues.  US gross domestic product declined 4.8 percent in the first quarter of 2020 as the first effects of the novel coronavirus were felt in March, and the effects are expected to be much larger through the remainder of the year.

In 2020, Kansas employment is forecast to decline 10.2 percent, contracting at an annual rate of more than 140,000 jobs compared to 2019.  The job losses are expected to be concentrated in the second quarter, following by an employment recovery in the third and fourth quarters of the year.  These projections are based on the assumptions that the novel coronavirus infections peaks in the second quarter of 2020 at a level manageable for the local health care system, and that additional stay-at-home orders are not required to combat the virus after the initial stay-at-home orders expire in May.  Additional outbreaks and stay-at-home orders would further reduce the employment outlook beyond what is presented here.

• The goods-producing are projected to decline by 14.7 percent, with job losses concentrated in the durable goods sector.  With substantial increases in unemployment and economic uncertainty, durable goods purchases are likely to decrease sharply, with a projected employment decline in the durable goods sector of 23.5 percent, a loss of more than 23,000 jobs.  The nondurable goods and construction sectors are projected to be less strongly affected, but are still expected to decline 6.7 and 9.8 percent, respectively.
• The trade, transportation, and utilities sector is forecast to experience an employment contraction of 13.3 percent, primarily focused in the retail trade sector.  Retail sales are forecast to decline substantially by more than 20 percent as residents limit travel and non-essential purchases, which is expected to lead to a retail trade employment of 17.8 percent.  The wholesale trade sector and the transportation and utilities sector are expected to decline 7.4 and 8.8 percent, respectively, as the declines in retail spending reverberate throughout the supply chain.
• The service sectors are forecast to decline 10.4 percent, with the largest contraction in the leisure and hospitality sector.  Employment in the leisure and hospitality sector is projected to decline 27.1 percent with an uncertain future about when full-service restaurants, bars and recreational businesses can begin operating again even in a limited capacity.  The other services sector, which includes repair shops, barber shops, and religious organizations, is projected to decline 11.8 percent.  Financial activities, professional and business services, and education and health services are forecast to be less affected by the downturn, with employment losses ranging from 4.9 to 6.4 percent.
• The government sector is expected to decline 2.2 percent, the least affected of any industry sector.  The job losses are projected to be concentrated in the local government sector, but no government sector is expected to increase employment in 2020.

Kansas City Employment Forecast

Released  May 5, 2020 (See previous version)

Total nonfarm employment in the Kansas City, KS-KS, metropolitan area is estimated to have grown by 0.8 percent in 2019, adding approximately 9,000 jobs.  For 2020, the impact of the novel coronavirus introduces substantial uncertainty into the employment forecast, as the virus along with stay-at-home orders and other restrictions on gathering have dramatically affected the economy.  US gross domestic product declined 4.8 percent in the first quarter of 2020 as the first effects of the novel coronavirus were felt in March, and the effects are expected to be much larger through the remainder of the year.

In 2020, employment in the Kansas City metropolitan area is projected to decline 12.2 percent, a contraction of more than 130,000 jobs.  The job losses are expected to be concentrated in the second quarter, following by a recovery in the third and fourth quarters of the year.  These projections are based on the assumption that the novel coronavirus infections peaks in the second quarter of 2020 at a level manageable for the local health care system, and that additional stay-at-home orders are not required to combat the virus after the initial stay-at-home orders expire in May.  Additional outbreaks and stay-at-home orders would further reduce the employment outlook beyond what is presented here.

• The manufacturing sector is projected to experience some of the sharpest declines of any Kansas City industry sectors, with an overall decline of 16.5 percent and an overall decline in the production sectors of 14.4 percent.  While manufacturing is less directly affected by stay-at-home orders than other sectors, reduced demand of non-durable and particularly durable goods is expected to lead to reduced employment and a slow recovery for manufacturing.  Employment in the construction sector is projected to decline by 11.4 percent due to declines in both home and commercial construction.
• Employment in the trade, transportation and utilities sector is forecast to decline 14.9 percent, the largest decline of any major industry group.  The retail trade sector is forecast to have the largest contraction, losing more than 18,000 jobs, as retail spending is not expected to return to 2019 levels until 2021 at the earliest.  The wholesale trade and the transportation and utilities sectors are projected to decline by 10.1 and 15.5 percent, respectively, in response to the decline in retail spending.
• The service sectors are projected to decline 13 percent, with the job losses not equally distributed throughout the services.  The leisure and hospitality sector, which includes restaurants, recreational activities, and hotels, is projected to decline 28.2 percent, the largest contraction of any single sector, with gatherings remaining limited and discouraged even after the stay-at-home orders end.  Most of the other service industries are forecast to have employment declines of approximately 10 percent, while the education and health services industry is the least affected with only a 6.8 percent employment decline.
• The government sector is expected to be least affected by the novel coronavirus, with government employment only projected to decline by 2.2 percent.  State and local government revenue declines may be mitigated to some degree by additional emergency funding from the federal government, but if not, additional job losses would likely occur.
   

*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 5, 2020 (See previous version)

In 2019, total nonfarm employment in the Wichita metropolitan area grew 1.8 percent, adding 5,500 jobs in its fastest growth since 2007.  For 2020, those gains are expected to be lost as the Wichita economy contracts sharply from the impact of the novel coronavirus.  The Wichita economy is forecast to have the largest downturn in the state of Kansas due to the region’s large concentration of aerospace manufacturers, which will be affected both by the novel coronavirus’ effects on air travel as well as the Boeing 737 Max production freeze in January 2020.  U.S. gross domestic product declined 4.8 percent in the first quarter of 2020 as the first effects of the novel coronavirus were felt in March, and the effects are expected to be much larger through the remainder of the year.

In 2020, employment in the Wichita area is expected to decline 14.6 percent, a contraction of more than 44,000 jobs, which would be a decline almost twice as large as the job losses in the last recession from 2008 to 2010.  The job losses are expected to be concentrated in the second quarter, following by an employment recovery in the third and fourth quarters of the year.  These projections are based on the assumption that the novel coronavirus infections peak in the second quarter of 2020 at a level manageable for the local health care system, and that additional stay-at-home orders are not required to combat the virus after the initial stay-at-home orders expire in May.  Additional outbreaks and stay-at-home orders would further reduce the employment outlook beyond what is presented here.

• Employment in the production sectors is projected to shrink by 23.2 percent. The durable goods manufacturing sector is expected to contract 28.8 percent, losing more than 13,000 jobs and comprising almost a third of total job losses in the Wichita area.  Wichita’s durable goods industry is expected to have a slower recovery and likely to have continued job losses in the third and fourth quarters of 2020 as aerospace manufacturers adapt to reduced demand for air transportation.  The nondurable manufacturing sector is forecast to experience a more modest contraction, with employment declining by 10.9 percent, while the natural resources and construction sector is expected to decline by 13.6 percent.
• The trade, transportation, and utilities sector is forecast to decline 14.3 percent, with the largest losses in retail trade.  More than 5,000 retail trade jobs are expected to be lost, a contraction of 16.2 percent in the sector.  The wholesale trade sector and the transportation and utilities sector are each projected to decline by approximately 1,000 jobs.
• The service sectors are projected to decline by 14.1 percent, comprising more than two-fifths of all jobs projected to be lost.  The leisure and hospitality sector is expected to decline by more than 10,000 jobs, a 30.6 percent of the sector and half of projected service sector job losses.  Other service sectors are expected to contract by 8 to 10 percent, with the information sector having the second-fastest contraction at 10.8 percent.  The professional and business services sector and the education and health services sector are forecast to decline by approximately 3,000 and 4,000 jobs, respectively.
• The government sector is expected to decline 1.8 percent, with the bulk of the decline concentrated in the local government sector.  No government sector is expected to add jobs in 2020, and overall the sector is projected to decline by fewer than 1,000 jobs.

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

Topeka Employment Forecast

Released May 5, 2020 (See previous version)

In 2019, total nonfarm employment in the Topeka metropolitan area declined by 0.4 percent, contracting by 400 jobs.  For 2020, the Topeka economy is projected to decline at a much faster rate as the novel coronavirus caused many businesses to shut down in the second quarter.  This will cause reduced spending throughout the economy even after stay-at-home orders are lifted.  U.S. gross domestic product declined 4.8 percent in the first quarter of 2020 as the first effects of the novel coronavirus were felt in March, and the effects are expected to be much larger through the remainder of the year.

In 2020, employment in the Topeka metropolitan area is projected to decline 10.8 percent, a contraction of more than 12,000 jobs.  While this would be a job loss four times larger than was experienced from the 2008 recession, it is still projected to be the smallest economic decline of any Kansas metropolitan area.  The job losses are expected to be concentrated in the second quarter, following by a recovery in the third and fourth quarters of the year.  These projections are based on the assumption that the novel coronavirus infections peaks in the second quarter of 2020 at a level manageable for the local health care system, and that additional stay-at-home orders are not required to combat the virus after the initial stay-at-home orders expire in May.  Additional outbreaks and stay-at-home orders would further reduce the employment outlook beyond what is presented here.

• The production sectors are projected to decline 10 percent, with the construction sector the hardest hit.  Employment in the construction sector is forecast to decline 17.2 percent, with almost 1,000 jobs lost.  The manufacturing sector is expected to be much less affected than manufacturing statewide due to the Topeka area’s high concentration of nondurable manufacturing.  Employment in the manufacturing sector is projected to decline 5.1 percent, approximately half the rate of contraction of the state’s manufacturing sector.
•  The trade, transportation, and utilities sector is projected to be the hardest-hit portion of the economy, with a 14.4 percent employment decline overall.  The majority of the job losses are forecast to be in the retail trade sector, which is expected to decline by more than 1,400 jobs. The transportation and utilities sector is also projected to be hard hit, with an employment decline of 17.4 percent.
• Job losses in the service sector are largely concentrated in the leisure and hospitality sector, which is projected to decline 29.6 percent and will comprise almost 40 percent of all jobs lost in the service sector.  No service sector is forecast to decline by less than 5 percent, as the effects of the novel coronavirus will be felt broadly throughout the economy.  The financial activities sector is projected to have the second-highest rate of decline among the services, at 14.4 percent.
• Employment in the government sector is projected to decline by 5 percent, shrinking by approximately 1,300 jobs.  These losses are expected to occur primarily at the state and local levels.

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