Wichita expected to lose twice as many jobs as in Great Recession, forecast shows

In 2020, the Wichita area will lose nearly twice as many jobs as during the 2008-10 recession, according to a new WSU economic forecast.

On Tuesday, Wichita State University’s Center for Economic Development and Business Research released a forecast that shows Wichita will lose roughly 44,000 jobs from 2019. That’s nearly twice as many jobs from the Great Recession. The Wichita area is expected to see a roughly 30% drop in nonfarm employment during the second quarter before bouncing back to end the year at a 14.6% decline in employment from 2019, the forecast shows. The statewide projection is a 10.2% reduction in labor from 2019.

It’s the second forecast put out by the organization in the past month. The first study put a dollar amount to losses in labor and output from goods and services. Both showed Wichita will be worse off than the rest of the state.

“The Wichita economy is forecast to have the largest downturn in the state of Kansas due to the region’s large concentration of aerospace manufacturers, which will be affected both by the novel coronavirus’ effects on air travel as well as the Boeing 737 Max production freeze in January 2020,” Tuesday’s study says.

The Wichita area is expected to lose 107,000 jobs at its peak before rebounding in the third and fourth quarters of 2020 to end the year with 44,461 fewer jobs, the studies show.

The 44,461 jobs are roughly 31% of the 140,000 fewer jobs expected to be in Kansas since 2019. Kansas City is forecast to lose about 59,000 jobs; Topeka roughly 12,000 jobs.

As a percentage, the Wichita area’s employment and economic output are larger losses than the other metro areas and the rest of the state. It’s also above the average combined, the studies show.

The Wichita area’s largest drop will be in the durable goods manufacturing sector, which includes aerospace, and will see a 28.8% drop, accounting for roughly 13,000 jobs. Wichita’s aerospace industry has suffered a few thousand layoffs this year, most from Spirit Aerosystems reducing production of the 737 Max, and several thousand furloughs attributed to the coronavirus.

CEDBR director Jeremy Hill said he expects more layoff in the aerospace industry and other industries still to come.

“As they find out that demand is not going to return back to where it was before, they are still dealing with supply chain issues — that is where we are going to see more layoffs right in that (aerospace industry),” Hill said. “And then retail, you know, the people they’ve laid off, they are going to hire some back and then they are going to realize that people have switched their demand to online or because of the fear … there is just not as much (demand) for retail.”

The Wichita area service sector industry is expected to fall 14.1%, or about 19,900 jobs; trade, transportation and utilities will contract 14.3%, or about 7,200 jobs; production industry, which includes aerospace, will drop 23.2%, or about 16,700 jobs; and government will lose fewer than 1,000 jobs.