Kansas economy finishes 2015 by shrinking three of four quarters

The Kansas economy shrank in the last quarter of 2015, completing a year in which the state contracted three of the four quarters, according to the U.S. Bureau of Economic Analysis.

The state saw a 0.7 percent drop in economic output in the last quarter, which runs from Oct. 1 to Dec. 31, compared to a year earlier, and a drop of 0.2 percent from the third quarter.

That was only enough to place the state as the 44th worst-performing in the nation, ahead of neighboring states such as Iowa, Oklahoma and Nebraska.

It shrank in the first and third quarters, as well. Overall, however, the state saw an annual growth of 0.8 percent between 2014 and 2015, according to the BEA. The U.S. economy grew 2.4 percent.

The biggest reason for the decline was the sharp fall in overall economic output by the state’s farm sector, which tumbled nearly 2 percent in the fourth quarter.

Crop and livestock farmers have both been struggling with significantly lower prices and incomes in 2015, although they generally enjoyed very profitable years in the five previous years.

Gov. Sam Brownback’s spokeswoman Eileen Hawley, in an email, focused on poor farm and energy results as the reason the state economy as a whole stumbled, deflecting any criticism of state tax policy.

“Kansas tax policy has been successful in the areas we would expect: business growth and low unemployment,” she said in the email. “No tax policy can overcome the dramatic downturn in international commodity markets that have negatively affected the agriculture and oil industries for the past two years.”

Rep. Steve Huebert, R-Valley Center, said Kansas isn’t the only state struggling.

“Three years is not near enough time for any tax policy to have concrete results,” he said. “And I think it was wrong for Brownback to make the ‘shot of adrenaline’ remark because truly it takes time and it’s only been three years.

“Everybody wants to try to pretend that Kansas is in this bubble where we’re the only place having problems. Across the country they’re having problems.”

Jeremy Hill, director of the Center for Economic Development and Business Research at Wichita State University, agreed that states that rely on agriculture and energy did poorly in the report.

“The Plains did not do well.” he said. “This is systematic of the whole region when you look at the broader map.”

Although two consecutive quarters of economic decline on the national level are generally called a recession, Hill said that might be too strong a term for the state because of the smaller size and possibilities of revisions.

But Hill said he wasn’t surprised with the GDP numbers because of the weakness of job numbers across the state.

This story was originally published June 14, 2016 at 9:22 AM with the headline "Kansas economy finishes 2015 by shrinking three of four quarters."