TOPEKA — Kansas can expect modest job growth in most sectors in 2016, according to predictions from Wichita State University.
WSU’s Center for Economic Development and Business Research projected a 1.4 percent employment growth rate in 2016, with 19,958 more people employed than in 2015. CEDBR estimated 1,404,869 people will be employed in nonfarm jobs over the course of this year, which would bring the total to 1,424,827 if the 2016 projections are correct.
Jeremy Hill, director of CEDBR, said the projections come from an economic modeling tool, but aren’t meant to be exact. The idea is to give the public a sense of the “tone” of the economy, and the 1.4 percent rate would indicate continued modest growth, he said.
“We’re not going to grow by 2 percent,” he said. “I don’t think we’re going to grow by 0.8 percent.”
Employment in the Wichita sector would grow by 1.1 percent under the projections. CEDBR didn’t release specific data about other Kansas metropolitan areas, though Hill said he expected roughly 1 percent growth in Topeka. Tight government budgets and high materials costs are limiting growth in public employment and food manufacturing, which are important to Topeka employment, he said.
Nationwide, employment has increased by 2.1 percent over the last year. Hill attributed the lower growth in Kansas to a strengthening dollar, which reduces demand for American exports. The agriculture and aerospace sectors, which both are important to the Kansas economy, are sensitive to those fluctuations, he said, and weakness can spread farther when consumers and businesses react by not spending or investing.
“It is a very slow-growth economy, a lot slower than the U.S.,” he said. “Businesses aren’t investing because they see a slower-growth economy.”
If the projections are correct, the biggest increase would be in private sector services, which would add 14,549 jobs, for a 2.2 percent growth rate. Manufacturing and other production sectors, such as construction, would add 2,825 jobs; trade, transportation and utilities would add 2,048; and government would add 536. Those estimates are based on consumption data, employment and government budgets, among other factors, Hill said.
CEDBR also projected a 2.5 percent increase in total wages paid in Kansas in 2016. Wages are estimated to grow 2.9 percent in this year, following a 2.1 percent increase in 2014.
The projections look at total wages paid, so an increase in the number of people employed would drive the total up, even if each worker wasn’t earning more, Hill said. Since 2008, most wage increases also have gone to the top 20 percent of wage earners because their skills can command more pay, while low and middle skill workers’ earnings are limited by slack in the labor market, he said.
Total manufacturing wages are projected to begin growing again next year for the first time since 2011, with a 1.6 percent increase. The increase would be almost entirely due to a higher number of people being employed, rather than higher wages per person, however, Hill said. Manufacturing tends to drive other economic activity, so wage growth is significant for other sectors like retail and professional services, he said.
Metal and machinery manufacturing are doing well, Hill said. Services related to information are growing, as are management and call centers, though those areas aren’t large contributors to overall employment, he said.
Retail sales also are expected to grow modestly, rising 1.9 percent this year and 1.1 percent in 2016, according to CEDBR. Their highest growth since 2007 was in 2012, when they rose 2.6 percent. Sales are difficult to predict, however, because they depend on consumer decisions, Hill said.