The Wichita area should see an across-the-board increase in jobs in 2019 , according to a new forecast from Wichita State University’s Center for Economic Development and Business Research.
The forecast, to be unveiled Thursday morning at the 39th Annual Kansas Economic Outlook Conference at Century II, predicts the area will add nearly 2,500 jobs next year, or a 0.8 percent increase in jobs. That’s more than double last year’s initial forecast of 1,065 jobs.
The bulk of the job growth is expected in manufacturing and construction.
According to the forecast, the Wichita metro area’s growth rate will be below Kansas City’s 1.4 percent jobs increase, but above Topeka’s 0.3 percent growth rate.
The forecast’s author said this week the report should come as a dose of good news following two years of job contraction in the Wichita area.
“I think the Wichita economy can grow, and has a lot of room for growth,” said Jeremy Hill, the center’s director.
To put this year’s forecast in perspective, Hill said it’s important to note that in 2017 total, non-farm employment in the Wichita metro — Butler, Harvey, Kingman, Sedgwick and Sumner counties — declined by 2,500 jobs. This year the jobs forecast expects the area to end flat to slightly down by fewer than 200 jobs.
Half of the job losses in 2017 came from the retail sector, Hill said. Retailers expanded and hired more workers in anticipation of economic growth that didn’t come. The remaining job losses came from “small declines” in the government, services and production sectors — which include durable goods manufacturers such as aircraft manufactures, non-durable goods producers such as food and chemical manufacturers, and residential and commercial builders — and overall weakness in the area’s economy.
It was “the correction that we knew was on the horizon just because the economy was slow,” he said of the local economy.
Hill said aircraft manufacturing wasn’t necessarily on the rebound this year and last, despite reports of companies such as Spirit AeroSystems — the area’s largest employer — planing to hire 1,000 new workers. Hill said there was contraction in aircraft manufacturing jobs in the past couple of years, which may have been from the effects of Spirit and other large aircraft suppliers bringing some of their work in-house, leading to job losses at smaller companies that previously supplied that work.
“In manufacturing, it has been pretty close to zero (in adding new jobs),” he said. “Aerospace, every time I had looked at it, had not been expanding.
“The numbers really aren’t telling the growth everyone wants to talk about.”
And fall out from the overbuilt retail sector continued into the early part of this year, contributing to those fewer than 200 job losses.
But Hill said around the second quarter of 2018, government data indicates the area’s economic sluggishness turned around.
“Growth is picking back up,” he said.
Job growth by sector
By percentages, the Wichita area’s production sector — including manufacturing and construction — is expected to see the biggest growth in 2019 at a 3.1 percent rate, or 670 jobs. That’s based in part on demand for new business and general aviation aircraft and residential and non-residential building permits. “With its projected growth . . . the sector would add the most jobs in a single year since 2014,” the forecast said.
In the trade, transportation and utilities sector, which includes retailers, a growth rate of 0.6 percent, or nearly 300 new jobs, is expected in 2019. That growth is anticipated to be helped by a projected growth of 0.4 percent in taxable retail sales.
The service sector — encompassing a variety of businesses including restaurants, hotels, accounting firms, banks, hospitals and schools — is projected to add 1,000 jobs next year, a 0.8 percent growth rate. The sector encompasses nearly half, or about 135,052, of the area’s 294,552 total jobs.
Finally, government jobs in the area are expected to grow 1.1 percent next year. That includes 300 jobs in local government, and about 150 jobs in state government.
The Kansas numbers
Statewide, job growth in 2019 looks to be robust.
The forecast expects the state to add nearly 14,000 jobs for a growth rate of 1 percent.
Job growth will be led by the service sector, where 8,500 jobs are expected to be added, the forecast said. That’s followed by 1.2 percent growth in Kansas’ production sector, for a total of 2,826 jobs. Like the Wichita area, the production sector will be fueled mostly by growth in manufacturing, and residential and commercial construction.
Those sectors are followed by 0.9 percent growth in trade, transportation and utilities for a total of more than 2,300 new jobs. The state’s government sector should see 0.1 percent growth, or a 100 new jobs. Hill said the reason that job growth in Kansas government is lower statewide but higher in the Wichita area is because other parts of Kansas are expected to see declines in state jobs because of the effects of a slower agriculture industry and rural population declines.