If there was ever a question that Wichita is tough, 2015 is it.
The Wichita metropolitan area is still working to shake off not one, but two big economy-shaking hits over the last decade, according to figures released Tuesday by the federal Bureau of Economic Analysis.
As a result, Wichita is well behind most of the country in its economic recovery and continues to be hobbled in its progress.
Last year’s gross domestic product for the metro area was $31.5 billion in inflation-adjusted dollars, up 1.3 percent from 2014. GDP is the measure of all the goods and services produced in Sedgwick, Butler, Harvey, Sumner and Kingman counties.
Not only was 1.3 percent growth about half the national rate, but it means Wichita still hasn’t recovered completely from the 2008-09 recession. The 2015 GDP was more than $1 billion below Wichita’s best year, 2007, in inflation-adjusted dollars, and is just the fifth best year of the last decade.
The strongest performing sectors for the five-county Wichita metro area were finance, insurance and real estate, and information. The weakest were durable goods, which includes aircraft, and professional and business services.
Since the recovery started in 2010, Wichita has grown an average of 0.6 percent a year. The rate for all U.S. metro areas is 1.9 percent, three times as fast.
So what’s the problem?
In two words: aircraft consolidation – probably.
Looking at the GDP numbers, the Wichita economy seemed to be recovering from the 2008-09 recession fairly well. By 2012, it was approaching the peaks set in 2007 and 2008.
But the general aircraft industry never really rebounded. Hawker Beechcraft struggled for three years before declaring bankruptcy in May 2012. Contracts were canceled and workers laid off, but 4,100 people still worked there when it emerged from bankruptcy in November 2012. Textron – the parent of Cessna Aircraft – bought the company at the end of 2013, merging and trimming workforces and facilities, and keeping some Beechcraft models.
Also in 2012, Boeing announced it would leave Wichita, taking about 2,000 jobs as it slowly shut down over two years.
In 2013, the economic activity coming from Wichita’s manufacturing sector dropped 28.8 percent. As a result the overall metro Wichita economy plunged 7.6 percent.
The city has struggled to get out of that hole since then. It grew strongly in 2014 and less so in 2015.
But 2016 is looking like it might turn out to be pretty good for Wichita, with 2,000 more jobs than a year ago, although aircraft consolidation may not be done here.
Diversifying away from such heavy reliance on aircraft is critical for Wichita, said local economist Robert Litan.
“We still haven’t recovered from their problems, but we haven’t found the next big thing to replace it yet,” he said.
He hopes that the flurry of entrepreneurial activity downtown and the efforts of Wichita State University to spark new technologies on the Innovation Campus will prove to be an engine of growth for Wichita.
“There are signs of hope, but these little seedlings will take time to grow,” he said. “I’m hoping that aircraft doesn’t implode in the meantime.”