Wichita will see job growth in 2018, but not by much

A new forecast has jobs in 2018 growing at 0.4 percent in the Wichita metro area — and 0.1 percent in Kansas.

That’s according to the Wichita State University Center for Economic Development and Business Research’s 2018 Employment Forecast, which will be delivered Thursday morning at the 38th annual Kansas Economic Outlook Conference at Intrust Bank Arena.

The forecast calls for 1,065 jobs to be added in the Wichita area, which includes Butler, Harvey, Kingman, Sedgwick and Sumner counties.

In Kansas, the forecast calls for the addition of 1,500 jobs.

The education and health care sector is the report’s bright spot for Wichita next year, with 2 percent growth year over year, while the professional and business services and leisure and hospitality sectors are each expected to grow by more than 1 percent next year. Combined, the forecast says, those sectors are expected to add 1,752 jobs in Wichita in 2018.

Those gains, however, will be offset by job losses in durable goods manufacturing, retail and local government.

Jeremy Hill, the WSU center’s director, says the area’s sluggish growth forecast for 2018 is almost a repeat of forecasts from the past couple of years.

“For Wichita, it’s the kind of growth rate we’ve been at for awhile,” he said, noting the area’s predicted job growth rate next year is the lowest among Kansas’ three biggest metro areas. The Kansas City area is forecast to grow jobs by 1.6 percent and Topeka by 0.8 percent.

What’s mostly holding back Wichita’s growth is aerospace manufacturing, Hill said. While demand and productivity are strong in commercial aviation, general aviation is flat. There hasn’t been a significant increase in hiring in aerospace manufacturing, and when there is it’s strategic and in small numbers, Hill said.

“The one sector that’s slowing us down is aerospace,” he said.

The outlook for aerospace manufacturing could change if orders for new business jets were to see a significant upturn, but even then it would take awhile to have a meaningful impact.

“It’s possible they could start hiring more,” Hill said, “but it’s such a long lead time, and there’s only so much labor in the market to hire anyway.”

There are pockets of growth within the area’s broader production sector, such as in food and chemicals, but even those subsectors of manufacturing are constrained somewhat by a tight labor market, he said.

Overall, the forecast for the metro area is 63 fewer production jobs in 2018.

“Unfortunately our outlook for manufacturing is not positive,” Hill said.

The forecast also calls for declines in the trade, transportation and utilities sector. That sector is projected to see a decline of 348 jobs, caused by job losses in the retail sector. The forecast says the decline in retail reflects overall slower economic growth and slower retail sales. The forecast notes that inflation-adjusted taxable retail sales in the metro area declined 0.3 percent between May 2016 and May 2017.

And local government is also expected to see a decline in jobs in 2018, the forecast says, an effect of a lower tax base caused by slower economic growth.

“Are we stalling out?” Hill said. “It sure looks close to it.”

But, he added, “I don’t think we’re stalling out.”

Kansas outlook

Statewide, overall jobs growth looks to be weak in 2018, the forecast says.

Like the Wichita area, the service sectors are expected to lead Kansas’ job growth next year with 2,700 new jobs. Those job gains will be in professional and business services, health care and financial services, which combined are expected to add about 3,800 jobs. Those gains will be partially offset by job losses of about 1,800 in information and other services sub-sectors, the forecast says.

Another growing sector for the state, albeit minor, is the trade, transportation and utilities sector. Despite a statewide decline in retail jobs, they will be offset by new jobs in wholesale trade, transportation and utilities. The sector is expected to add 600 new jobs.

Employment in Kansas’ production sectors will be mixed. While construction is expected to add jobs, manufacturing and natural resources — agriculture and oil — are both expected to see job contraction. The largest decline will be in durable goods manufacturing, the forecast says. In total, there will be about 700 fewer jobs in the production sectors, the forecast says.

The state also will see declines in federal, state and local government employment by about 1,000 jobs. The largest declines will be in local government, the forecast says.

This story was originally published October 5, 2017 at 6:30 AM with the headline "Wichita will see job growth in 2018, but not by much."