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Kansas
Labor Market
Jeremy Hill December 2013
• National/Global Conditions – It’s a small world after all
• Population Growth – Is Grandma having a baby?
• Labor Market – A job is a job!
• Paradigm Shift – Has the labor market crashed into a new reality?
• Employment Outlook – The Mad Scientist might make a comeback
Overview
National /Global Conditions
It’s a small world after all
December 2013
December 2013
Top 4 Exports from Kansas
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000Ja
n-02
Sep-
02
May
-03
Jan-
04
Sep-
04
May
-05
Jan-
06
Sep-
06
May
-07
Jan-
08
Sep-
08
May
-09
Jan-
10
Sep-
10
May
-11
Jan-
12
Sep-
12
Food & Agri Chemicals Machinery Aerospace
US headlines • U.S. auto sales continues to improve • U.S. real GDP grew by 2.8% • U.S. Employment grew by 204,000 in Oct,
which was above expectation • U.S. Small Firms shaken by shutdown
Forecasts 2013 2014
GDP 1.6% 3.1% Consumer Spending 1.9% 3.3% Consumer Price Index 1.5% 1.8% Savings Rate 4.5% 4.8% Source: Moody's 12-04-13
Population Growth
Is grandma having a baby?
Population Projections
Births Migrants
Deaths Migrants
2010 – 2040 W Migration: 14.4% (406,607) W/O Migration: 13.6% (385,728)
Rural Kansas Relative Concentration Over 60-85+
Under 0-39
2010 Population
2010-2020 (migration)
2010-2020 (w/0 migration)
• Trends are not always the greatest predictors, but you can’t ignore them
• Rural areas are likely to struggle with an aging population base
• Metro areas have benefited from migration
• Kansas will continue growth slowly over the next 30 years - (~0.45% annually)
Summary
Labor Market
A job is a job!
3Q 2013 Unemployment Rate *Underemployed
United States 7.6 14.1
Kansas 5.7 11.3
Missouri 6.8 12.2
Unemployment
Source: BLS – LAUS * U-6
Underemployed includes discouraged workers and people working part-time because they are unable to find full-time work.
Aug 2013 Unemployment Rate *Underemployed
United States 7.3
Kansas 5.1
Wichita 6.8 12.4?
EMP-Population Ratio
55
57
59
61
63
65
67
69
1976
1977
1979
1981
1983
1985
1987
1988
1990
1992
1994
1996
1998
1999
2001
2003
2005
2007
2009
2010
2012
US Recession Kansas United States Other KansasSource: BLS- LAUS, Census Population Estimates
EMP-Population Ratio
56
58
60
62
64
66
68
7019
76
1981
1986
1991
1996
2001
2006
2011
United States
Sedgwick County
Source: Bureau of Labor Statistics
56.0
61.0
66.0
71.0
76.0
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
EMP-Population Ratio
Untied States
Kansas
Source: Bureau of Labor Statistics
Ford County
52.0
54.0
56.0
58.0
60.0
62.0
64.0
66.0
68.0
70.019
7619
7819
8019
8219
8419
8619
8819
9019
9219
9419
9619
9820
0020
0220
0420
0620
0820
1020
12
EMP-Population Ratio
Untied States
Kansas
Source: Bureau of Labor Statistics
Crawford County
• Labor market remains weak in Wichita • Although the unemployment rate has improved,
labor force has declined • Underemployed in Kansas could be as high as
11.3% • Excess labor stock will keep wages down in some
occupations (e.g. production workers) • Tight labor markets remain in western Kansas and
in selected sectors (e.g. professional services)
Summary
Paradigm Shift
Has the labor market crashed into a new reality?
• Evolutionary – Business Professional Services
» Basic business skills – Energy Sector – Health care?
» Urban/Rural – Home nurse aids
• Revolutionary – Agriculture and value added Manufacturing
» Sustainable Productivity? (machine -> genetic) Science – Manufacturing
» Global rebalancing (value of $, trade deficit, mature infrastructure) » Regional flow of capital
Evolutionary / Revolutionary
• Excess labor supply = ? • Productivity with technology = profits
– Productivity with specialization = profits • Contingent Workforce
– Temporary Agencies – Contract workers – Driving forces (Cost management and value added strategy)
• Corporate ladder to lattice work • Survey
– Competing for talent – Developing leaders – succession planning
Employer and Employee Relationship
Sources: Deloitte, Boiling Point?; Pew Research Center, Millennials-A Portrait of Generation Next
Jobs Demand Gap
• Manufacturing – 67% reported moderate to severe shortages
• Machinists, operators, craft workers, distributors, technicians • Aging workforce
– Deficiencies • Problem solving, vocational training, basic skills (attendance/work ethic)
• Non-Manufacturing – Information Technology 44% – Engineering 36% – Research & Development 29% – Sales 29% – Marketing 23%
Sources: Deloitte, Boiling Point?; Pew Research Center, Millennials-A Portrait of Generation Next
Skills
Sources: Accenture 2013 – Skills and Employment Trend Survey
• Gen Y – – Education - marginally attached
• Careers NOT based on demand & NOT academically/professionally challenging programs
– Work ethic – self-expression, helping others, family
• Job versus career • Social media – communication with generation Y
• Standoff?
Generational redefinition of the meaning of a career
Sources: Deloitte, Boiling Point?; Pew Research Center, Millennials-A Portrait of Generation Next
• There will be a shift in industries moving forward, which will affect labor demand causing some structural employment problems.
• The employer and employee relationship will change, but employees may not be ready.
• Generation Y will eventually understand the reality of a career, and employers will compromise .
Summary
Employment Outlook
The Mad Scientist might make a comeback.
Career aspirations – may include exacting revenge on a perceived antagonist and re-animating corpses
EMPLOYMENT
-7%
-5%
-3%
-1%
1%
3%
2006 2007 2008 2009 2010 2011 2012 2013 2014
US
Kansas
Wichita
Source: CEDBR
Production Sectors
• Natural Resources - Oil is rematerializing and creating wealth, but is far from previous peak
• Construction - Market place is improving in selective segments and selective areas. Overall, it is matching weak general growth
• Machinery – has been up because of agriculture and aerospace suppliers, continued growth is not likely
• Plastics/rubber- steady increase since 2009, auto and general consumption is improving slowly
• Food Manufacturing – declining since 2012 because of cost of production
Nat. Res. & Const.
Durable Goods
Non-Durable Goods
Goods Production
Source: CEDBR
Trade, Trans. &Util. Sectors
Wholesale Trade
Retail Trade
Transportation & Utilities
• Consumption • Unemployment and income are limiting growth
• Retail • Large scale growth is not likely – pushed to discount stores and
high end retail. • Transportation
• Pipeline improvements are opening up processing and byproduct opportunities
Trade, Transportation and Utilities
Source: CEDBR
Services - 2013 Outlook
• Financial Services – has adapted to a constantly evolving regulatory environment, but pressure remains for small and regional banks
• Professional Services – there is currently unmet demand for labor
• Education– Higher Education funding is counter to needs and national trends
• Leisure and Hospitality – slowing, but continued growth
Services Fin. Act. Pro. & Bus.
Edu. & Health Leisure & Hosp.
Other
Services
Information
Source: CEDBR
Summary
• Labor market is determined and resourceful, and will continue to reengage over the next year
• Consumers will continue to bargain shop, while maintaining a balanced budget
• Businesses will invest strategically, carefully matching the fledgling increased demand
• Business are focused on “tomorrow” instead of the “past” or the “potential”
• Moderate growth will not occur because of slowing agriculture, machinery equipment, food production, and a weak aerospace market
• Employment is expected to increase by 1.4% (19,141) in 2014. This remains subpar from potential growth.
CEDBR DATA WSU's Center for Economic Development and Business Research is a responsive, reliable source of local, state and national demographic and economic data.
KANSAS INFORMATION DATABASE The Kansas Information Database (KID) is a set of data containing economically pertinent news articles and information on the state of Kansas and the Midwest region.
MARKET RESEARCH CEDBR provides customized market research to government, businesses and nonprofit agencies. Research.CEDBR.org
FORECASTS CEDBR provides employment and retail sales forecasts, as well as population projections. Presentations.CEDBR.org
CEDBR E-CONNECTION CEDBR publishes e-connection, a monthly e-mail newsletter, providing ongoing reports on business and the economy, as well as timely delivery of special reports. Newsletter.CEDBR.org
Kansas
Labor Market
Jeremy Hill December 2013
Wichita 2012 (a) 2013 (e) 2014 (f)
2013-2014 Level Change
2013-2014 Percent Change
Total Nonfarm 285,594 287,352 290,771 3,419 1.2% Production Sectors 67,355 67,612 68,466 854 1.3% Natural Resources, Mining & Cons. 14,534 13,793 14,220 427 3.1% Manufacturing 52,821 53,819 54,246 428 0.8% Durable Goods 45,347 46,224 46,596 372 0.8% Non-Durable Goods 7,475 7,595 7,650 55 0.7% Trade, Transportation & Utilities 49,747 49,778 50,114 336 0.7% Wholesale Trade 9,516 9,515 9,548 33 0.3% Retail Trade 31,306 31,310 31,510 200 0.6% Transportation & Utilities 8,926 8,953 9,056 103 1.1% Service Sectors 127,866 129,964 132,021 2,056 1.6% Information 4,525 4,498 4,550 52 1.1% Financial Activities 10,560 10,806 11,050 244 2.3% Professional & Business Services 30,083 31,397 32,229 832 2.6% Education & Health Services 43,470 43,401 44,154 753 1.7% Leisure & Hospitality 28,561 29,118 29,227 109 0.4% Other Services 10,666 10,744 10,810 66 0.6% Government 40,626 39,998 40,170 172 0.4% Indicators Nominal Taxable Retail Sales (mil) 8,832 8,866 9,228 362 4.1% *Annual values are derived from average quarterly observations and projections. (a) actual (e) estimated (f) forecasted