The Center for Economic Development and Business Research (CEDBR) at Wichita State University recently released an updated Kansas employment forecast examining trends for the near future.
According to the Bureau of Economic Analysis, the US economy grew 5.7% in 2021 after contracting 3.7% the previous year. The first half of 2022 saw two consecutive quarters of negative real GDP growth, prompting some journalists to declare a recession. These statements could be premature, however, according to the CEDBR.
The National Bureau of Economic Research is the official entity for declaring a recession, which is always retroactive and includes other variables beyond GDP. Currently, signals regarding general economic conditions are mixed. 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 terms of jobs, average annual employment in the Wichita metro area – which includes Sedgwick, Butler, Harvey and Sumner counties – increased by 4,917 workers in 2021, a growth of 1.7%. This is a slightly higher rate than in Kansas as a whole (1.1%). The impact of the global pandemic on the economy caused jobs to drop by 39,700 in April 2020. Since then, the region has added 36,300 workers. In 2022, year-over-year growth was above 2% for the first two quarters, which is above the historical average growth rate.
In the region, the Wichita Metro recovery is expected to moderate the rest of the year and into 2023 as tighter monetary policy and labor conditions cloud the outlook. Although global and domestic market conditions are slowing, the Wichita metro area is expected to experience one of the strongest growths in 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 flat growth at the state level (due to similar monetary policy and a labor market close to full employment) and the decline expectations in some of the other markets.
Production sectors are expected to experience employment growth of 1.7% with the addition of more than 1,155 workers. The durable goods manufacturing sector is expected to lead the growth, adding 1,169 jobs, as the aerospace industry continues its growth momentum. Non-durable goods manufacturing, however, is expected to decline by 56 jobs. The natural resources and construction sector is expected to experience near flat growth in 2023 as demand for new homes slows due to interest rates and appreciating home prices.
Employment in the trade, transportation and utilities sector is expected to increase by just under 240 workers, up 0.5%. The slowdown in growth in this industry is mainly due to persistent inflation which is eroding household purchasing power and its effects on the retail trade sub-sector.
Service sectors are expected to grow by 0.8% and are expected to account for 35% of job growth across the region. At the state level, this sector is expected to account for 55% of all job growth in 2023 (adding 5,600 jobs). The professional and business services sector is expected to lead Metro Wichita’s growth, adding more than 440 jobs to the approximately 1,300 service sector jobs created in 2023. The leisure and hospitality sector grew by 7.1 % in 2022 due to changing retail demand. and market opening. However, this growth is expected to moderate in 2023 as inflation has depleted purchasing power.
Labor market conditions for households remain strong as employers continued to add jobs in 2022 and are projected to grow 1.1% in 2023 (higher than the statewide forecast rate of 0.6%) . Growth will put additional pressure on the market and will likely reduce unemployment over the next couple of years.
Inflation-adjusted taxable retail sales increased 10.9% in 2021 and 1.7% in 2022 as economic market conditions led to increased purchasing power. In 2022, as the economy opened up after the global pandemic, consumer spending shifted from retail to spending on services like restaurants and entertainment. Additionally, inflation has eroded discretionary income, or after-tax wages, which has slowed consumption by middle- and lower-income households – a trend that is expected to keep retail sales growth to a minimum for 2023 and 2024. at least.
- Eurozone yields rise thanks to improved economic forecasts
- Economic Forecasts for the United States and the Developed World: Debt Anchoring to Keep Interest Rates, Growth and Inflation Low
- Secretary Duque’s alarming economic forecast
- Federal Reserve Not Declining, Means More Cycles In Economic Forecast