Topeka Employment Forecast

Released October 7, 2021 (See previous version)

The Topeka metropolitan area’s* employment decreased by more than 4,300 employees in 2020, a contraction of 3.9 percent.  In the second quarter of 2020, the area’s employment declined by 8,900 workers, the area’s single largest employment loss on record.  Over the next four quarters, 5,600 jobs were regained as the region began to recover.  Unemployment peaked at 12.6 percent of the labor force in April 2020, and it consistently declined over the next ten months to reach a new low of 3 percent in February 2021.

A modest recovery is expected to continue for the Topeka area in 2022, adding almost 1,300 jobs for 1.2 percent growth.  The first quarter is expected to have the fastest growth, but the recovery pace is projected to be relatively even throughout the year.  The recovery is subject to higher uncertainty than other recent periods of growth, with recurring novel coronavirus outbreaks, tight labor markets, and brittle supply chains as potential downside risks.

• The production sectors are forecast to increase by almost 150 jobs, expanding 1.1 percent. Both of the production sectors, the construction sector and the manufacturing sector, are expected to grow robustly, at 1 and 1.2 percent, respectively.   The construction sector is projected to remain slightly below its pre-pandemic peak, while the manufacturing industry is expected to exceed its pre-pandemic peak.
• Employment in the trade, transportation, and utilities is projected to grow by 0.8 percent, adding more than 100 jobs. The retail trade sector is forecast to lead the expansion, adding almost 100 jobs with a 0.9 growth rate.  The transportation and utilities sector is projected to increase by 0.8 percent, while wholesale trade is forecast to expand by 0.4 percent.
• The service sectors are expected to account for 74.6 percent of total job growth in the Topeka area, expanding 1.8 percent and adding almost 1,000 new workers. Leisure and hospitality is projected to be the fastest-growing sector at 4.2 percent after suffering the sharpest decline during the novel coronavirus outbreak.  The professional and business services sector and the education and health services sector are projected to be the other job growth engines in the service sector, expanding 1.4 and 1.5 percent, respectively.
• Government sector employment is forecast to grow 0.2 percent in 2022 after declines in 2020 and 2021. The growth is expected to be concentrated in the local government sector, while state and federal employment are both projected to decline modestly.

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

Wichita Employment Forecast

Released October 7, 2021 (See previous version)

Average annual employment in the Wichita metropolitan area* decreased by more than 18,000 workers in 2020, a contraction of 6 percent.  With the onset of the novel coronavirus pandemic in the second quarter of 2020, employment declined by 37,600 workers before recovering by 15,000 workers in the third quarter.  From the fourth quarter of 2020 to the second quarter of 2021, the area added an additional 2,800 jobs as the recovery continued at a slower rate. As a result, the unemployment rate rose to 19.2 percent in April 2020 and then declined throughout the rest of the year and into 2021, reaching a low of 5.1 percent in June 2021.

The recovery is expected to continue at a modest pace in 2022 as employment is forecast to increase by more than 3,100 workers, an expansion of 1.1 percent.  Growth is projected to be relatively consistent throughout the year, adding 300 or more jobs every quarter.  The recovery remains somewhat fragile due to supply chain disruptions, tight labor markets, and potential resurgences of the novel coronavirus.  Given the weakness in the aerospace manufacturing market in 2020, Wichita will likely continue to have outsized downside risk for the local economy compared to the statewide or national economy.

• The production sectors are forecast to increase in employment by 1.1 percent with the addition of more than 700 workers. The natural resources and construction sector is projected to lead growth, adding more than 400 workers as housing demand remains robust.  The manufacturing sector is expected to resume growth in 2022 after declining in 2020 and projections to contract modestly in 2021.  The durable goods sector is forecast to add more than 250 workers, while the nondurable industry is projected to add fewer than 50 jobs.
• Employment in the trade, transportation, and utilities sector is expected to increase by more than 400 workers, growing 0.9 percent. The transportation and utilities sector is projected to grow 1.8 percent, adding more than 170 workers, almost matching its pre-pandemic peak.  The retail trade sector is forecast to expand 0.7 percent and add more than 200 jobs, but the industry is expected to remain below its pre-recession peak for a number of years beyond 2022.  The wholesale trade sector is projected to have the slowest growth in the industry at 0.3 percent.
• The service sectors are forecast to grow 1.3 percent and are projected to represent 58.6 percent of all area employment growth. The leisure and hospitality sector is expected to add more than 1,200 of the 1,800 service sector jobs created in Wichita in 2022 following the loss of more than 4,300 workers in the sector in 2020.  The professional and business service sector is forecast to have the second-fastest growth among service sectors, at 1.1 percent, as the industry reaches beyond its pre-pandemic peak.
• The governmental sector is projected to add fewer than 200 jobs for a growth of 0.4 percent. Both the local and state government sectors are forecast to add approximately 100 jobs, while federal government employment is expected to remain flat.

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

Kansas City Employment Forecast

Released  October 7, 2021 (See previous version)

Total employment in the Kansas City, MO-KS, metropolitan area^[1] contracted by more than 47,000 workers in 2020, a decline of 4.3 percent.  More than 109,000 jobs were lost in the second quarter of 2020 due to the onset of the novel coronavirus pandemic, but then employment recovered by 78,000 jobs over the next four quarters. As a result, the unemployment rate spiked to 13.2 percent in April 2020, followed by a rapid decline, reaching 4.4 percent in July 2021.

The economy is forecast to continue to recover in 2022 in Kansas City with projected growth of 1.5 percent, the fastest of any Kansas metropolitan area.  By the end of 2022, the area is forecast to recover more than 90 percent of the jobs lost in 2020. However, substantial downside risks remain present that could derail or slow the recovery.  These include brittle supply chains, difficulty attracting workers back to the labor force, and potential spikes in the novel coronavirus.

• Employment in the production sectors is forecast to increase by 0.9 percent, led by the construction sector, which is projected to grow 1.9 percent. Manufacturing is expected to grow by 0.3 percent, adding more than 200 jobs.  The production sectors are projected to exceed their pre-pandemic peak in 2022 after increasing by more than 1,200 jobs.
• Trade, transportation, and utilities employment is expected to expand by 1.2 percent. The transportation and utilities sector is forecast to be the fastest-growing sector, adding more than 1,100 jobs while growing 1.8 percent as Kansas City’s logistics hub continues to expand.  The retail trade and wholesale trade sectors are projected to increase 0.9 percent and 1 percent, respectively.  Both are expected to remain below their pre-pandemic peaks in 2022, while the transportation and utilities sector is forecast to exceed its previous level.
• The service sectors are projected to add more than 11,500 jobs, growing 2 percent. The leisure and hospitality sector is forecast to be the fastest-growing of the service sectors, expanding 3.9 percent in 2022 after declining by 18.8 percent in 2020. In addition, the professional and business services sector and the education and health care sector are each projected to grow by 1.9 percent, each gaining more than 3,000 jobs.
• Employment in the governmental sector is forecast to increase by almost 1,200 workers for 0.8 percent growth. However, the added jobs are expected to largely be in the local government sector.

[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.

Kansas Employment Forecast

Released October 7, 2021  (See previous version)

In 2020, average annual employment contracted by 4.6 percent relative to 2019.  The sharpest decline was in the second quarter of 2020 with the onset of the novel coronavirus pandemic when employment decreased by 8.8 percent compared to the second quarter of 2020.  More than 127,000 jobs were lost in the second quarter, but the economy began to rebound in the third quarter, recovering 53,300 jobs. That recovery has continued through the first half of 2021 as well, adding back an additional 19,500 jobs to the state economy in the last three quarters.  Unemployment peaked at 12.6 percent in April 2020 but declined and remained below 4 percent by February 2021.

Employment growth is projected to continue in 2022 with the forecasted addition of 13,401 new jobs and a gain of 1 percent.  Growth is expected to be the fastest in the first quarter of the year before leveling off in the second half.  Though the economy will likely be more stable than in 2020, economic uncertainty remains elevated relative to pre-pandemic levels, with the possibility for additional spikes in novel coronavirus cases to potentially put a damper on the recovery and expansion.  Tightness in both supply chains and labor markets could lead to minor disruptions having outsized effects on economic growth.

• Employment in the production sectors is projected to increase 1 percent, adding more than 2,300 jobs in the state. The construction sector is expected to have the highest growth in employment, expanding 1.9 percent as demand for housing continues to increase.  The manufacturing industry is forecast to grow more modestly with an increase of 0.4 percent in the durable goods sector as the aerospace sector begins to recover from a difficult recession due to the curtailing of flights in 2020 caused by the novel coronavirus pandemic.  The nondurable goods sector is expected to grow 0.9 percent after experiencing continued growth during the pandemic.
• Trade, transportation, and utilities sector employment is forecast to expand 0.8 percent, increasing by more than 22,00 jobs. The fastest growth is expected in the transportation and utilities sector, at 2.6 percent, as Kansas continues to grow as a logistics hub for the Midwest.  The retail trade sector is projected to increase by 0.1 percent, following a forecasted 3.7 percent growth rate in 2021, bringing the industry close to pre-pandemic employment levels.  The wholesale trade sector is expected to expand by 0.3 percent. 
• The service sectors are projected to account for 62.8 percent of all job growth in Kansas in 2022, adding more than 8,400 jobs and expanding 1.3 percent. The leisure and hospitality sector was the hardest hit in 2020, contracting by 15 percent, and is expected to be the fastest-growing sector in 2021 and 2022, expanding 5 percent and 3.7 percent, respectively.  The education and health services sector is forecast to gain almost 2,300 jobs, while professional and business services are projected to add more than 1,000.
• Government sector employment is expected to recover modestly after decreasing in both 2020 and 2021, adding back more than 400 jobs in 2022. Most of these jobs are expected to be added at the local level, while state and federal employment are forecast to remain relatively flat.