Kansas Employment Forecast
2024 Kansas Employment Forecast
January Update
Kansas has rebounded strongly, surpassing the national and the Plains region averages in each quarter of 2023. The state's growth peaked at 9.4% in Q3 of 2023, significantly higher than the national average of 4.8% and the Plains region of 5.1% in the same quarter. The underlying contribution to the growth within the state over the previous year was agriculture, which was from a combination of prices and drought insurance. Manufacturing regained its strength in the second and third quarters of the year, as agriculture waned slightly. Both industry drivers have fueled additional growth within construction, retail, and government, which picked up in the second quarter. Kansas's real GDP trajectory indicates an economy that has overcome challenges over the previous decade and is now expanding rapidly. Although it will not likely maintain the top-growing economy in the United States over the next few quarters, it should maintain a more robust economy than its peer states.
Employment
For 2023, the employment numbers suggest that Kansas saw a growth rate of 1.9%, significantly more robust than its natural rate or historical average. As we look to the future, the outlook remains optimistic. In 2024, Kansas is forecasted to experience a more modest growth rate of 0.5%, followed by a slight reduction to 0.4% in 2025. This slowing pace indicates a maturing economy that may stabilize closer to its natural growth rate.
In the capital city of Topeka, the growth rate is expected to follow the state's general trend, albeit slower, with projected increases of 0.4% in 2024. Kansas City is anticipated to see a stronger performance relative to Topeka, with growth rates double the state average at 1.0% in 2024. Wichita's forecast steadily climbs, with growth rates of 0.7% in 2024, as manufacturing continues to catch up with global demand. The 'Rest of Kansas' category—encompassing the regions outside the major cities—is expected to face a minor contraction in employment, with a forecasted decline of 0.1% in 2024.
Production Sector Strengths:
- Natural Resources, Mining & Construction: Both the employment and GDP forecasts indicate consistent growth. Employment is expected to rise by 1.8% in 2024, with the increase focused on mining and construction. The GDP forecast predicts the strongest growth within the mining sector due to stronger-than-expected consumption and reduced global supply. Agriculture is expected to slow down but still contribute, and construction is plugging along with demand remaining higher than the ability to supply.
- Manufacturing: The durables sector is shown to have a steady employment outlook, with a notable 0.8% increase in 2024. GDP in durable goods manufacturing is expected to grow significantly by 4.3% in 2024 and 2.4% in 2025, indicating strong production and potentially increased external demand. The nondurables sector shows signs of peaking from several years of robust growth. Employment is expected to slow while firms increase production with their existing workforces.
Service Sector Strengths:
- Information Services: The information sub-sector stands out in the service sector, with employment forecasted to grow by 3.0% in 2024. This aligns with the substantial 9.5% increase in GDP for the information sector in 2024, suggesting a booming tech and information industry in Kansas, potentially due to innovations and investments.
- Professional & Business Services: Employment in professional and business services is projected to grow consistently, with an increase of 1.2% in 2024. GDP in professional, scientific, and technical services also shows a strong upward trend, with a forecasted increase of 1.2% in 2024, highlighting the sector's crucial role in the knowledge-based economy.
- Education & Health Services: This sub-sector showed significant employment growth of 3.7% in 2023, mostly within the health care portion and a rebound based on labor demand. Private education GDP is expected to slow because of increasing costs and competition. Health has an optimistic GDP growth forecast, which follows broader demographic trends.
Trade and Retail Sector Strengths:
- Retail Trade: Despite minor fluctuations in employment, the retail trade sector shows an optimistic GDP growth forecast of 7.1% in 2023, reflecting strong consumer spending and an improving retail environment from the recent growth within Kansas. Total nominal income is expected to grow by 2.8%, whereas taxable retail sales will increase by 4.7% in 2024. While consumers likely held consumption into Q4 of 2023 and for 2024, the model is likely overly pessimistic about wage increases due to the previous less-than-competitive environment.
Government Sector Strengths:
- Government and Enterprises: Employment in the government sector is expected to decrease slightly in 2024 but with a stable outlook into 2025. State and local government GDP shows growth, which may reflect increased public expenditure and investment in state projects.
The labor market conditions in Kansas have shown remarkable resilience and strength, particularly when considering the state's return to full employment was ahead of the nation. In 2023, the unemployment rate experienced a slight uptick to 3.0%, which is estimated to hold steady through 2024 and 2025. The number of unemployed individuals will increase marginally, indicating that while the market remains healthy, there is room for improvement in matching job seekers with employment opportunities. Furthermore, as both the labor force and employment are expected to increase, this indicates that the market will retain and attract workers, whether through net in-migration or by drawing previously unengaged individuals into the workforce.
Kansas' economy is poised to maintain its robustness, underpinned by recent industrial investments and the strength of its core sectors, including agriculture and manufacturing. These foundational pillars of the state's economy have historically provided stability and are now buoyed by strategic investments that promise to propel the state's economic vitality well into the future. However, there are economic headwinds that warrant attention. The potential for oil price spikes remains a concern, possibly impacting both production costs and consumer spending. Additionally, there is apprehension about the possibility of a Federal Reserve misstep that could disrupt financial markets and economic growth. Another area of vigilance is wage competitiveness; as neighboring states and industries evolve, maintaining an attractive environment for skilled workers is critical.
Kansas City Employment Forecast
2024 Kansas City Employment Forecast
January Update
As we set our sights on the future, the Kansas City, KS region, an economic powerhouse for the state, appears to remain on a growth trajectory. Observing its recent performance and understanding the impending economic trends for 2024 can offer a clearer vision of the region's growth potential.
Kansas City has experienced consistent employment growth throughout 2022 and into 2023. The growth rates ranged between 2.5% and 3.5% during the middle of 2022, which is exceptionally strong growth even for the region. The broader growth of the economy came from construction and professional services. Since then, regional growth decelerated due to the tightening of the labor market. January was the peak year-over-year growth at 3.2%; in November, that growth slowed to 0.5%. The Kansas City forecast, however, is for it to reaccelerate to 1.0% in 2024.
As an economic backdrop, the state has rebounded strongly, surpassing the national and the Plains region averages in each quarter of 2023. Kansas's growth peaked at 9.4% in Q3 of 2023, significantly higher than the national average of 4.8% and the Plains region of 5.1% in the same quarter. The underlying contribution to the growth within the state over the previous year was agriculture, which was from a combination of prices and drought insurance. Manufacturing regained its strength in the second and third quarters of the year, as agriculture waned slightly. Both industry drivers have fueled additional growth within construction, retail, and government, which picked up in the second quarter. Kansas's real GDP trajectory indicates an economy that has overcome challenges over the previous decade and is now expanding rapidly. Although it will not likely maintain the top-growing economy in the United States over the next few quarters, it should maintain a more robust economy than its peer states.
Production Sector
Manufacturing Sector: Durable and nondurable goods manufacturing are facing demand and labor challenges. While there are major investments to stimulate demand, the model is forecasting a decline in 2024. The durables side is expected to grow in 2025 as those industry investments attract new labor to the region.
Natural Resources, Mining, & Construction: The natural resources, mining, and construction segment reflects robust growth in 2023 with a 5.0% increase, indicating active development. However, a minor decline is forecasted for 2024, with an outlook for stabilization in 2025. The slight decline reflects the market reaching a peak, rather than any major concerns in demand.
Trade and Retail Sector
Trade: In 2023, the trade sector was estimated to have a slight decline of 0.2%, which could be attributed to negative consumer sentiment, shifting consumer habits, and external economic influences like housing. However, the forecast for 2024 and 2025 reveals an optimistic turnaround with growth rates of 0.3% and 0.8%, respectively. This rebound suggests resilience in the trade industry, which is expected to adapt and thrive despite any short-term challenges. Part of that resilience is from per capita income expanding to $64,547
Service Sector
Education & Health Services: Education and health services were estimated to see significant growth in 2023 and to continue that trend in 2024 and 2025, reflecting the growing demand for healthcare services and educational opportunities in the region.
Leisure and Hospitality: Leisure and hospitality, a sector sensitive to consumer confidence and disposable income, is expected to witness a dip in 2024, potentially due to economic adjustments and shifts in consumer spending, but is projected to recover in 2025.
Government Sector
Government Sector: Government employment shows a steady increase, indicative of stable public sector investment and potentially growing public services to support the city's expanding population and economic activities.
The labor market in Kansas City is showing a pattern of recovery and growth post-2021. After a considerable dip in the unemployment rate from 4.2% in 2021 to 2.7% in 2022, there's a slight uptick forecasted for the following years, stabilizing at 3.1%. Despite the minor increase in the unemployment rate, the overall employment numbers are on an upward trajectory. From 1,097,908 in 2021, employment rises steadily each year, reaching an estimated 1,156,343 by 2025.
This upward trend in employment is complemented by growth in the labor force, which suggests a positive movement of workforce participation, possibly due to the return of workers to the labor market, migration, or new entrants. The expansion from 1,144,319 in 2021 to a forecasted 1,192,276 in 2025 reflects confidence in the local economy and the creation of new job opportunities.
The data suggests that Kansas City's labor market is resilient, with the ability to not only rebound from setbacks but also forge a path of incremental growth. This is a positive sign for the city's economic health and future investment and development prospects. Economic challenges in 2024 include oil price fluctuations, changes in Federal Reserve policies, or shifts in wage competitiveness.
Topeka Employment Forecast
2024 Topeka Employment Forecast
January Update
Topeka, the capital city of Kansas, stands at a pivotal juncture of economic transformation. While the city's recent performance provides a basis for understanding current conditions, it's the anticipation of 2024 that offers a glimpse into the city's future economic potential.
In 2023, Topeka experienced a notable rise in employment, signifying an improved economic climate and the underlying growth within its manufacturing sectors. The steady increase through the months contributed to a year-over-year growth rate that peaked at 1.9% midway through the year before settling at a rate of 1.5% towards the end. These figures suggest that Topeka's labor market has not only recovered from any downturns but is also expanding, which is conducive to sustainable long-term growth. The 2024 forecast for Topeka is to grow by 0.4%, which is above the trend for the regional economy.
As an economic backdrop, the state has rebounded strongly, surpassing the national and the Plains region averages in each quarter of 2023. Kansas's growth peaked at 9.4% in Q3 of 2023, significantly higher than the national average of 4.8% and the Plains region of 5.1% in the same quarter. The underlying contribution to the growth within the state over the previous year was agriculture, which was from a combination of prices and drought insurance. Manufacturing regained its strength in the second and third quarters of the year, as agriculture waned slightly. Both industry drivers have fueled additional growth within construction, retail, and government, which picked up in the second quarter. Kansas's real GDP trajectory indicates an economy that has overcome challenges over the previous decade and is now expanding rapidly. Although it will not likely maintain the top-growing economy in the United States over the next few quarters, it should maintain a more robust economy than its peer states.
Production Sector
Manufacturing Sector: The manufacturing sector is poised for a rebound, particularly in durable goods, which are expected to experience a 1.3% increase in employment in 2024, though the growth appears to be tapering off by 2025. The non-durables sub-sector, while showing a slight decline in 2023, is forecasted to recover with an increase in employment of 1.5% in 2024 and 1.7% in 2025, suggesting a regaining of momentum.
Natural Resources, Mining, & Construction: Of the three components of the natural resources, mining, and construction sector, construction is expected to have the most robust growth in 2024 due to broader economic conditions within the state. The broader sector had exceptional growth of 4.4% in 2023, due to consumption and federal spending. The subdued growth of 0.2% increase projected in 2024 reflects the limited labor supply.
Trade and Retail Sector
Trade: The trade sector, including retail, anticipates a modest downturn in 2023, with a slight recovery forecasted for 2024 and stabilization in 2025. This suggests that while the sector is not booming, it is maintaining a steady workforce to meet consumer demands. Total nominal income growth is expected to continue, with forecasts indicating a 4.2% rise in 2024 and a 4.0% increase in 2025. These figures suggest a bolstered economy with rising personal wealth, which could translate into increased consumer spending and investment potential within the city. Although retail sales have been weak, it is expected to bounce back, with projected real increase of 3.7% in 2024.
Service Sector
Education & Health Services: This sector is one of the standout performers in Topeka's employment scene, with a strong increase of 4.2% in 2023, followed by stable growth in subsequent years. This is indicative of the ongoing demand and expansion within the healthcare industry and the broader education services.
Professional Services: In Topeka, the professional services sector is set to be a bright spot in the employment landscape over the coming years. With an anticipated growth of 2.1% in 2023, the sector is expected to continue its upward trajectory, though at a slightly moderated pace, with increases of 1.1% in 2024 and 0.4% in 2025. This steady growth signals the sector's robust health and its pivotal role in Topeka's knowledge-driven economy. As professional and business services encompass a wide range of activities—from legal and accounting services to consulting and marketing—this sector's expansion is indicative of a maturing business environment and a rising demand for specialized knowledge and expertise. The sustained growth also reflects the adaptability and innovation within these services, which are essential for supporting the broader business community in Topeka and contributing to the overall economic development of the region.
Government Sector
Government Sector: Employment in the government sector is expected to see a marginal decrease in 2024, with a forecasted decline of 0.1%, and this trend is predicted to continue into 2025. Despite this, the sector remains a significant employer in the city.
Labor Market Dynamics
The labor market conditions for 2023 show a minor increase in the unemployment rate to 3.1%. Despite this slight uptick, the number of employed individuals is expected to continue its upward trend, reaching 118,645. This is a sign of continued economic health and suggests that the city's labor market is robust enough to absorb new entrants. The forecast for 2024 and 2025 projects that the unemployment rate will hold steady at 3.1%. Employment is predicted to grow incrementally each year, with the labor force also expanding, albeit at a modest rate. By 2025, the number of employed individuals is forecasted to reach 119,160, with the labor force slightly increasing to 122,842.
These figures suggest that while the labor market in Topeka is not experiencing explosive growth, it is exhibiting the kind of steady improvement that contributes to a stable economic environment. The consistency in employment growth, coupled with a stable unemployment rate, points to an equilibrium between job creation and workforce expansion, a positive sign for Topeka's economic prospects.
The challenge for Topeka will be to ensure that this stability is not rocked by external economic factors such as potential oil price fluctuations, changes in Federal Reserve policies, or shifts in wage competitiveness. Navigating these factors successfully will be key to maintaining the health of Topeka's labor market.
Wichita Employment Forecast
2024 Wichita Employment Forecast
January Update
Wichita, the largest city in Kansas, is set to embrace a promising economic horizon in 2024. The city's past and projected data reflect a resilient and adaptable economic landscape against the Kansas economy's broader backdrop and will regain its position as an economic driver of the state.
In 2023, Wichita's employment levels demonstrated fluctuating patterns, highlighting the city's dynamic economic landscape. The year began on a strong note with a 3.2% year-over-year increase in January. This positive trend continued, albeit at a slower pace, with figures dipping slightly by April to a 2.2% increase and then more noticeably to a 1.4% increase in May. The employment estimates suggest a further cooling of employment growth but turned around in November. It should be noted that the annualized growth for 2023 remains almost four times the region’s natural rate and is difficult to sustain. The outlook for Wichita is strong despite the tight labor conditions. The 2024 forecast is 0.7%, or almost 2,300 net new jobs.
As an economic backdrop, the state has rebounded strongly, surpassing the national and the Plains region averages in each quarter of 2023. Kansas's growth peaked at 9.4% in Q3 of 2023, significantly higher than the national average of 4.8% and the Plains region of 5.1% in the same quarter. The underlying contribution to the growth within the state over the previous year was agriculture, which was from a combination of prices and drought insurance. Manufacturing regained its strength in the second and third quarters of the year, as agriculture waned slightly. Both industry drivers have fueled additional growth within construction, retail, and government, which picked up in the second quarter. Kansas's real GDP trajectory indicates an economy that has overcome challenges over the previous decade and is now expanding rapidly. Although it will not likely maintain the top-growing economy in the United States over the next few quarters, it should maintain a more robust economy than its peer states.
Production Sector
Manufacturing Sector: The durables sector is poised for stronger growth. Over the last year, Wichita was estimated to have grown by 3.8%, which was driven by the excessive demand in aerospace. The positive growth momentum is expected to continue through to 2025. The non-durables sector declined by 4.0% in 2023, but is expected to recover modestly in the subsequent years.
Natural Resources, Mining, and Construction: The sector was estimated to have a notable growth of 3.3% in 2023, primarily from the sector's construction portion; however, agricultural production was also robust. The forecast for 2024 indicates a slight retreat, with a -0.7% change, before stabilizing in 2025 with a modest uptick of 0.3%. The temporary dip and slower growth are a reflection of the limited capacity to keep up with development along with slowing demand in agriculture.
Trade and Retail Sector
Trade: In 2023, the sector saw a slight increase in employment by 0.6%, suggesting a stable demand for trade services, which encompasses both wholesale and retail trade. This growth, while modest, indicates consistent consumer and business spending patterns within the city. Moving into 2024, the forecast shows an improved momentum with an employment growth rate of 0.8%, signaling an uptick in economic activity and consumer confidence. This reflects a more robust economic environment. The model is optimistic about taxable retail sales, with a forecast growth of 3.9% despite nominal income growth remaining muted.
Service Sector
Financial Services: The financial activities sector in Wichita is poised for growth, with an anticipated increase of 0.7% in 2023, as the number of jobs is expected to rise from 12,033 to 12,116. This positive trend is projected to continue into 2024, with a forecasted growth rate of 1.0%, boosting employment figures to 12,235.
Education and Health Services: The education and health services sector in Wichita is on a trajectory of steady growth, with employment expected to rise by 0.9% in 2023, climbing from 45,725 to 46,131. This upward trend is set to persist through 2024, with another 0.9% increase, bringing the number of jobs to 46,553, indicative of sustained demand for these vital community services.
Other Services: Other service industries are showing positive momentum, with an estimated of a 1.0% increase in employment for 2023, suggesting a rise in opportunities within this diverse sector. Following this uptick, the year 2024 is forecasted to see continued expansion at a rate of 1.3%, signifying growing engagement in a variety of service activities within the local economy.
Government Sector
Government Sector: Government sector employment was estimated to rise by 2.0% in 2023, tied to the recent growth in the broader economy. The growth is anticipated to sustain momentum into the following years, with a 0.6% increase in 2024 and a further 0.8% rise in 2025, reflecting a consistent investment in government operations and infrastructure.
Labor Market Dynamics
Wichita's labor market has shown a trend of recovery and expansion over the recent years. From a high unemployment rate of 4.6% in 2021, there was a significant drop to 3.2% in 2022, reflecting a positive shift in job availability and economic conditions. The slight estimated increase in the unemployment rate in 2023 to 3.4% is tempered by the consistent growth in employment numbers, suggesting an ongoing demand for labor.
The forecast for the following years up to 2025 indicates a steady unemployment rate of 3.5%, alongside a progressive increase in employment, reaching an anticipated 315,260 employed individuals. The expected growth in the labor force to 326,306 by 2025 suggests a widening pool of talent and skills, possibly driving further economic activity and opportunities in the city. This upward trend in employment figures could be indicative of Wichita's economic strategies bearing fruit, as the city continues to navigate post-pandemic recovery and adapts to the evolving job market
The Wichita economy has demonstrated considerable resilience and growth, reflected in its recovering labor market and promising employment forecasts. However, concerns linger regarding the volatility of oil prices, which can significantly impact the cost of goods and services and, by extension, the purchasing power of consumers. Any unexpected shifts in Federal Reserve policies could also introduce uncertainties, potentially affecting investment and hiring decisions within the city's industries. Moreover, the competitiveness of wages remains a crucial factor; as the labor market tightens, Wichita must ensure that wage growth keeps pace with the cost of living to attract and retain talent. Addressing these concerns will be vital for Wichita to maintain its economic momentum and to safeguard against potential headwinds that could disrupt its progress.
*The Wichita metropolitan area consists of Sedgwick, Butler, Harvey, and Sumner counties.
Rest of Kansas
2024 Rest of Kansas Employment Forecast
January Update
As we navigate the intricacies of economic growth, the Rest of Kansas region – encompassing all non-major metropolitan areas excluding Topeka, Kansas City, and Wichita – promises a vibrant economic future. Reflecting on its past performance helps project its growth trajectory for the upcoming years, especially as 2024 looms on the horizon.
The non-metropolitan areas of Kansas, which encompass the regions outside of Wichita, Topeka, and Kansas City, have shown a noticeable employment growth in 2023, rising from 513,883 to 525,570, marking a robust 2.3% increase. This uptick signifies a dynamic economic expansion across various industries beyond the state's urban centers and the unexpected strength of agriculture. However, looking ahead to the forecast years of 2024 and 2025, a slight contraction is anticipated, with a marginal decline of 0.1% each year, suggesting a plateau in employment growth.
As an economic backdrop, the state has rebounded strongly, surpassing the national and the Plains region averages in each quarter of 2023. Kansas's growth peaked at 9.4% in Q3 of 2023, significantly higher than the national average of 4.8% and the Plains region of 5.1% in the same quarter. The underlying contribution to the growth within the state over the previous year was agriculture, which was from a combination of prices and drought insurance. Manufacturing regained its strength in the second and third quarters of the year, as agriculture waned slightly. Both industry drivers have fueled additional growth within construction, retail, and government, which picked up in the second quarter. Kansas's real GDP trajectory indicates an economy that has overcome challenges over the previous decade and is now expanding rapidly. Although it will not likely maintain the top-growing economy in the United States over the next few quarters, it should maintain a more robust economy than its peer states.
Production Sector
Manufacturing Sector: The durables subsector has shown resilience, with employment numbers climbing from 33,700 to 34,434, a 2.2% increase from 2022 to 2023. The Nondurable portion continued is strong growth run into 2023. The model is forecasting demand to soften after multiple strong years in 2024.
Natural Resources, Mining, and Construction: This sector witnessed robust growth, with employment increasing from 25,167 in 2022 to 26,654 in 2023, marking a rise of 5.9%. The positive trend is expected to continue into 2024 with a projected growth of 6.1%. This upswing reflects a strong market demand and increased activity, particularly in the construction and mining sectors, despite potential headwinds.
Trade and Retail Sector
Trade: Trade in the region has demonstrated stability with a modest estimated growth of 1.0% in 2023. The sector seems poised for a slight contraction in the near term, with forecasts predicting a -0.2% change in 2024 and a -0.1% change in 2025, reflecting shifting consumer patterns and lots of competition with online and larger markets.
Service Sector
Information Services: Showed one of the most significant growth rates, the information services sector expanded by 5.0% in 2023. An even higher growth rate of 5.5% is anticipated for 2024, suggesting that this sector is benefiting from technological advancements and digital transformation initiatives.
Financial Activities: This sector experienced a growth of 3.1% in 2023, with employment rising to 23,108. However, a slight dip is forecasted for 2024 with a -0.6% change, potentially due to economic fluctuations affecting financial markets.
Education & Health Services: A vital component of the service industry, this sector saw a 5.0% increase in employment in 2023, reflecting ongoing demand for health services and educational professionals. The sector's growth is expected to stabilize, with a slight increase of 0.8% forecasted for 2024.
Government Sector
Government Sector: Employment in the government sector increased by 1.5% in 2023, reaching 127,383. However, forecasts predict a retraction in the workforce with a -1.8% change in 2024, which could reflect budgetary restraints or policy changes leading to downsizing.
The employment outlook for the rest of Kansas, excluding its three major metropolitan areas, reflects a mixed economic scenario as it heads into 2024. While certain sectors, such as Natural Resources, Mining & Construction, and Information Services, display robust growth, others, like Durables Manufacturing and Financial Activities, anticipate potential setbacks.
Key concerns that may impact these forecasts include the volatility of oil prices, which directly affects the Natural Resources and Mining sector. Fluctuating prices can lead to uncertainty in investment and employment within this industry. Additionally, changes in Federal Reserve policies, which could result in altered interest rates, have the potential to influence economic activities broadly, impacting sectors like Financial Activities and Construction. Another factor is the competitive landscape of wages. As neighboring states and industries adjust their wage structures, the rest of Kansas may face challenges in attracting and retaining talent, particularly in sectors like Education & Health Services and Professional & Business Services.