e-connection (May 2011 Edition, Vol. 6, No. 5)

Wichita Industry News and Developments, 1st Quarter 2011

The 1st Quarter 2011 issue of Wichita Industry News and Developments, which provides a brief overview of statistical trends and major announcements by industry sector, is now available.  The report covers the Wichita MSA, which is comprised of Butler, Harvey, Sedgwick and Sumner counties in Kansas.

A Review of China’s Economic History

Working under the direction of the Center for Economic Development and Business Research, Linda Mendy, a WSU graduate student, has completed a report titled The Revolution of the Chinese Economy. This article provides a review of literature pertaining to China’s economic reform, the results of that reform, China’s current position in the world and projections of China’s GDP. 

Access this report here.

Wichita’s Cost of Living Remains Below Average

The Council for Community and Economic Research recently released the first quarter 2011 ACCRA Cost of Living Index. Wichita’s Cost of Living Index for first quarter was 92.5. The national average for 312 urban areas is 100. 

Analysis of the data gathered in the most recent pricing event revealed wide regional variations in the price of whole chickens. The highest price per pound was $2.29 in St. Paul, Minn. The lowest price was $0.84 per pound in Blacksburg, Va. Wichita’s average price was $0.98 per pound. 

Honolulu had the highest overall grocery prices, while five cities in Texas had the lowest overall grocery prices. Wichita’s grocery index value was 91.6, compared to the national average of 100 for the urban areas participating first quarter.  

Learn more about the ACCRA Cost of Living Index.

WSU Current Conditions Index Reflects Stability

The WSU Current Conditions Index increased 0.4 percent from fourth quarter 2010 to first quarter 2011. All of the Index indicators either improved or remained the same from quarter to quarter, except the number of outbound airline passengers at Wichita’s Mid-Continent airport, which decreased 16 percent. Despite that decline, the overall 0.4 percent quarterly increase was the highest since second quarter 2010. This is a good sign that the local economy is showing signs of stability. 

Read more about the first quarter Index.

WSU Leading Economic Indicators Index Shows Significant Strength

The WSU Leading Economic Indicators Index increased a significant 2.6 percent from fourth quarter 2010 to first quarter 2011 and an even larger increase of 6.4 percent from first quarter 2010 to first quarter 2011. All of the Index indicators improved during first quarter of this year, except for a 4.7 percent increase in Kansas initial unemployment claims. Even with that increase in claims, the level of improvement in the other Index indicators points to the Wichita economy doing well through the end of this year. 

To see how Index indicators have performed, click here.

Leading Economic Indicators Index - April 2009

The WSU Leading Economic Indicators Index is designed to give an indication of where the Wichita economy is headed. Leading indicators tend to change before the economy itself changes. The WSU Leading Economic Indicators Index is composed of nine monthly indicators including:

Monthly initial claims for unemployment insurance
Building permits, new residential construction
Building permits, new non-residential construction
National Index of Consumer Confidence
Average weekly hours worked in manufacturing
New orders for aircraft
Stock prices of aerospace companies
Wheat prices (futures) and the
Conference Board’s national index of leading economic indicators

The WSU Current Conditions Index is designed to reflect the present state of the economy. The WSU Leading Economic Indicators Index, on the other hand, is designed to forecast future movements in the economy.

From March to April, the WSU Leading Economic Indicators Index declined; however, with a monthly loss of 1.3 percent, this was the smallest decline since September 2008. It takes at least three months to begin to see a trend in this Index, so it will take at least a couple of months to determine whether we can anticipate an improvement in the local economy by year-end.

From March to April the U.S. Index of Consumer Confidence increased 13.9 Index points, and the Standard & Poor’s Index of Aerospace Stock prices increased 9.6 percent. The inflation-adjusted value of Wichita’s residential building permits, the number of hours worked in manufacturing in the Wichita area, the price of wheat futures, and The Conference Board’s Leading Index of Economic Indicators also increased during this same time frame. It is primarily the number of initial unemployment claims in Kansas that has negatively impacted the Index, especially over the past five months.