The Wichita State University Center for Economic Development and Business Research released the 2021 employment forecast for Wichita and Kansas.
For Wichita, unemployment spiked in April 2020 to 17.7% due to the coronavirus pandemic. The economy began to recover in the third quarter as unemployment dropped back to 6.8% in October 2020.
Recovery is expected to continue in the fourth quarter of 2020 and job growth is expected into 2021. Average employment growth is forecast to be 0.7% in 2021, which would add more than 2,000 jobs back to the Wichita economy.
However, the economy in the city will likely remain volatile due to the continuing coronavirus outbreak, the vaccine rollout, and high economic uncertainty.
Jeremy Hill leads the CEDBR and says aerospace will be soft. Still, the 737 MAX flying again will be good for Spirit AeroSystems down the road.
“Obviously the 737 MAX improving opens up a lot of new opportunities for jobs to really come back. That definitely helps our forecast in the short term and long term,” said Hill. “But we still think there’s a lot of issues with trade and overall global demand. So our forecast unfortunately has some declines in that manufacturing segment particularly in Wichita and in aerospace.”
WSU’s CEDBR said if the national recovery and vaccine have effects on the high end of expectations, the city’s growth is expected to grow up to 1.4%. If the national recovery is more modest or downside risks are realized, Wichita’s employment is projected to remain close to flat in 2021. A full recovery from the coronavirus recession across all local industries is expected to take years.
Wichita’s employment recovery is expected in the service sector, followed by the trade, transporation and utilities sector.
As for Kansas, the unemployment rate rose to 11.9% in April 2020 during the start of the coronavirus pandemic. Unemployment declined to 6.7% in the third quarter.
Employment is expected to recover more modestly in the fourth quarter of 2020 and into 2021. Economic uncertainty will remain high statewide in 2021 until the vaccine to the novel coronavirus is administered to the full population, leading to expectations of muted economic recovery throughout the year.
Kansas’ average employment increase is projected to be 0.7% in 2021, adding almost 10,000 jobs. This growth, plus the third and fourth quarter growth in 2020, would recover approximately half of the employment lost during the initial outbreak of the novel coronavirus. A faster than expected national recovery could boost Kansas’ growth to a projected 1%, while a sluggish national recovery could reduce Kansas’ growth in half to 0.4%.
Kansas’ employment recovery is expected in the service sector, followed by the trade, transportation and utilities sector. The government and production sectors are forecast to lose employment.