The region’s economy continues to mirror the national trend: moderate growth, low inflation, low employment and some evidence that tight labor markets are finally pushing up wages a little.
But economist Frank Lenk suggests Kansas City needs to step it up. It’s not doing enough to keep up with cities of roughly the same size in key areas, he writes in his annual economic forecast.
“The KC economy is currently matching the U.S. economy stride for stride, and is expected to do so in the future …” Lenk writes. “Nonetheless, the region appears to be struggling to keep up with the economic performance of its peers.”
Lenk is the director of research services at the Mid-America Regional Council, which is one of the partners in the KC Rising initiative launched three years ago to push toward a more competitive economy over the next 20 years.
Officials are looking at three key areas – growth, median household income and quality jobs. The idea is to put Kansas City alongside 30 peer cities and move from the middle of the pack to the top 10 in all three categories. That looks like a long slog:
• Kansas City’s real gross domestic product rose 1.9 percent from 2015 to 2016. That’s 19th among the 31 cities. KC would have to double that rate to catch Seattle at No. 10. San Jose, at 7.8 percent, was No. 1.
• The area’s 2016 median household income – half of us made more, half made less – was $61,385. That’s 14th best and actually a couple steps back from the year before. Incomes rose 2.2 percent here in that year, but it would take growth at one and a half times that rate to reach the top 10.
• It’s similar with quality jobs, an area in which Kansas City does relatively well. Kansas City was No. 12 among the 31 in the first quarter of this year but its growth rate would have jump by two-thirds to get in the top 10.
“Despite not growing as fast as its peers,” Lenk writes, “the metropolitan area’s current rate of economic expansion continues to lower its unemployment rate, and Kansas City’s unemployment rate remains slightly lower than it the national rate.”
Lenk’s report takes note of several large development projects in the region, including UPS’s addition of hundreds of jobs at its facility in Edgerton, Garmin’s addition of up to 2,600 jobs with its headquarters expansion in Olathe, and Amazon’s new facilities in Edgerton and Kansas City, Kansas, each adding 1,000 workers. On the Missouri side, the report cites almost $2 billion in real-estate investment along the streetcar line in Kansas City and says Cerner remains on target to add 15,000 jobs over several years as it continues to build its Bannister campus.
In fact, job growth – three new jobs out of every four – has swung to the Missouri side of the metro area in the last couple years.
“Undoubtedly, Cerner’s growth and the revitalization of downtown Kansas City, Missouri, go a long way toward explaining the resurgence of the Missouri side of the regional economy,” Lenk writes.
And two other factors: Sprint, a major employer, is on the Kansas side and continues to lose jobs. Although it’s “unclear which is cause and which is effect,” Kansas overall had poor job growth since 2015, and actually lost 9,000 jobs in the year ending in September 2017 – the worst performance of any state in the country.
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-- Jeff Fox is The Examiner’s business reporter and editor. Reach him at email@example.com or 816-350-6313. He’s on Twitter @FoxEJC.