Boeing closure contributes to Wichita State’s downward jobs forecast
10/09/2013 2:53 PM
08/05/2014 9:00 PM
The coming closure of Boeing Wichita helped push Wichita State University to revise down its Wichita area jobs forecast for 2012.
The Center for Economic Development and Business Research on Tuesday released its revised jobs forecast calling for a 0.6 percent increase, 1,735 jobs, due to slower-than-expected national growth, weakness in Europe, and the Boeing announcement.
The center had originally forecast gains of more than twice that amount, 3,800 jobs, at its annual forecast in October.
In the revised forecast, manufacturing is expected to start growing again, but the first wave of layoffs at Boeing will hold that to a barely positive 0.2 percent, said center director Jeremy Hill.
Boeing said layoffs will begin in the third quarter, but the company hasn’t said how many will occur this year.
The good news, Hill said, is that job growth in manufacturing will mean that Boeing employees will likely be able to find work. Boeing does not expect local suppliers to be hurt by the closure.
“In 2012 and 2013, those who want to stay in the aviation industry ought to be able to stay in it,” Hill said.
The biggest growth will be in the service sector, the economy’s largest sector. Professional and business services employment will jump nearly 4 percent, while the hotel/restaurant and the health care/private education sectors will see modest growth. Health care employment saw a good increase in 2011 because of the opening of several health care facilities, he said.
The troubled information and financial sectors will continue to decline, by about 565 employees.
Job gains in the transportation and utility sector are expected to counteract losses in retail and wholesale trade, creating a 0.2 percent gain, or 75 jobs.
Natural resources and construction employment will see a normal seasonal employment cycle.
Government employment is expected to increase by about 185 jobs as government budgets stabilize.
The Wichita economy is feeling some benefit from revival of the U.S. economy, but that revival has been painfully slow and inconsistent.
“The U.S. economy is showing signs of improving and so is employment,” Hill said. “Despite some negative news, if you drill down, there is solid growth at the national level.”
The debt crisis in Europe poses a serious challenge to the Wichita market, as it does to the rest of the world, because it could cause another banking crisis and worldwide shrinkage of credit.
Economist Malcolm Harris, a finance professor at Friends University, said he thought the center’s forecast seemed reasonable, if a bit conservative.
“I think we’ll feel a bit more of a tailwind from the national economy, but my guess is not dramatically different: maybe 1 percent growth, instead of 0.6 percent.”
The center will continue to look at how the economy develops and issue another forecast in the spring.