A well-known national economic forecasting company said this week that Wichita could fall back into recession.
Wichita was one of 22 U.S. cities deemed to be at risk of a double-dip recession by Moody's Economy.com.
The reason, said associate economist Patrick Armstrong, is the echo from the precipitous plunge in Wichita's manufacturing a year ago.
Although manufacturing has been a strong point nationally over the past nine months, Wichita's aircraft-heavy manufacturing sector hasn't seen as much of a rebound.
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As the lull in local manufacturing drags on through 2010, he said, some retailers and service companies that depend on the manufacturers and their workers could decide they must cut back, lay off workers or shut down.
Half of the 22 cities are in the South and five, including Wichita, are in the Midwest. The rest are in the West and Northeast. Moody's Economy.com is now saying that the odds of the U.S. falling back into recession have risen to more than one in four.
But any recession would be significantly less painful than the manufacturing downturn in late 2008 and early 2009.
"If it were to fall back into recession, it wouldn't be nearly as severe," Armstrong said. "It would feel more like stagnation."
Working in Wichita's favor, he said, was the lack of price collapse in the housing market, as it has in some markets.
But Jeremy Hill, director of the center for Economic Development and Business Research at Wichita State University, said he doesn't buy the prediction.
Wichita is already at the bottom, he said, and probably won't go lower.
He said that while some economic indicators are down from a year ago, others are moving up. The city will start its long, gradual rebound starting sometime mid-next year, he said.
"I'm not so sure that locally you're seeing the same signals," Hill said.
But, he warned, such an expectation could be derailed if the national or global economy sustains a major shock, such as a war or a default by a country.