Kansas growth lagged in 2012, hurt by farm losses

The Kansas economy staggered through a drought-ravaged 2012, growing just 1.4 percent in inflation-adjusted terms, according to an initial estimate of the U.S. Bureau of Economic Analysis.

That’s considerably less than 2.5 percent for the nation as a whole, landing Kansas 35th among states.

“That is slower than I would have expected, given the employment – disappointing,” said Jeremy Hill, director of the Center for Economic Development and Business Research at Wichita State University.

North Dakota led the nation, expanding its economy at a blistering 13.4 percent from drilling and construction in the Bakken oil shale region.

Other strong states were Texas at 4.8 percent, Oregon at 3.9 percent, Washington at 3.6 percent, and California and Minnesota at 3.5 percent.

Kansas’ performance last year was also considerably below the 3.2 percent growth in 2011 and 2.6 percent growth in 2010.

The actual Kansas GDP in 2012 was $139 billion, just shy of 1 percent of the total U.S. economy. GDP is a measure of all goods and services produced.

Losses in the state’s agriculture sector were the biggest factor in Kansas’ poor performance, according to the estimate. Drought cut the corn, milo and soybean crops by double digits, and forced ranchers to cull herds and feedlots to close.

The strongest sector for Kansas was durable goods manufacturing. Hill said that likely reflects growth in the sale of Kansas-made farm machinery.

Another strong sector was the finance and insurance area, which includes many business services.

Hill said that probably reflects continued strength for temporary work agencies, which tend to thrive when employers aren’t confident enough to hire workers full time. It could also reflect a trend toward outsourcing of some business functions.