Even as the national economy slows, Kansas City’s economy is likely to see an uptick for a year or so, thanks in part to the addition of construction jobs for the new terminal at Kansas City International Airport.
After that, it’s back to the usual pattern – Kansas City growing a bit more slowly than the nation as a whole, according to the 2020 Economic Forecast prepared by Frank Lenk, director of research services at the Mid-America Regional Council.
“Locally, the Kansas City economy has been growing slower than the nation and its peers over the last couple years,” Lenk writes. “However, it has begun to accelerate just as the U.S. economy slows.” (MARC and others define Kansas City’s peers as the 15 metro areas that are immediately larger than Kansas City and the 15 immediately smaller, everything from Seattle and San Diego to Louisville and Memphis.)
Big picture: The brief bump in U.S. growth from the 2017 tax cuts is over, and we’re back to gross domestic product growth of around 2 percent. Growth of 2.1 to 2.4 percent is likely for 2019, then 1.7 to 2.3 percent next year and 1.7 to 2.1 percent in 2021.
But recent figures suggest things are picking up in Kansas City. Employment growth is rising, and KCI is expected to help generate 3,000 construction jobs between the fourth quarter of 2019 and the fourth quarter of 2020. Those USDA jobs being moved here from Washington will help, too. Then again, look for continued erosion in retailing, finance and insurance, and information.
Employment in Kansas City has seen gains and losses. When Sprint was doing well in the 1990s, Kansas City outpaced the national average in growth, but that changed around the turn of the century.
“Sprint’s declining market share has hit the Kansas City region particularly hard,” Lenk writes. “While Sprint shows signs of stabilizing, it has been the major factor in losing 14,000 information industry jobs during the last eight years …”
The T-Mobile/Sprint merger is still on track, and there’s talk of Overland Park being maintained as a “second headquarters.” That would help, Lenk writes, but he adds, “There are many obstacles to achieving the vision of a thriving second headquarters, however.”
The far happier news is that Cerner, Burns & McDonnell, Black & Veatch and others in the “professional, scientific and technical services” fields have added more than enough jobs to offset the losses in the information field.
So is a recession coming? Lenk puts that at “not likely” between now and the end of 2021.
Economist Chris Kuehl spoke Tuesday evening at an Independence Economic Development Council gathering and entertained the same question. He said he doesn’t see a recession but pointed out that even low growth gives those looking to invest a good deal of pause.
He also recycled the oldest joke in economics to poke a little fun at his own profession.
“We have,” he said, “successfully predicted 17 of the last three recessions.”
Jeff Fox is The Examiner’s editor. Reach him at firstname.lastname@example.org or 816-350-6365. He’s on Twitter at @FoxEJC.