August 25, 1999

INSTITUTE PREDICTS SLIGHT ECONOMIC SLOWDOWN FOR KANSAS

LAWRENCE -- The Kansas economy will expand a little more slowly in the remainder of 1999 and in 2000 than it did in 1997 and 1998, according to a report from the University of Kansas' Institute for Public Policy and Business Research.

In the summer issue of its quarterly report, "Kansas Economic Outlook," the institute states that the number of non-farm jobs will increase 3 percent in 1999 and 2.8 percent in 2000, following increases of 3.3 and 3.5 percent in 1997 and 1998, respectively. Although nominal personal income growth is expected to remain steady, real personal income growth will decline due to slightly higher inflation, the institute's findings predict.

The institute's director of forecasting, Norman Clifford, will present an update of these predictions to help develop strategies at the first annual Governor's Economic Innovation Summit Oct. 22 at KU. The conference will gather university, government and business leaders from across the state to consider innovative ways to keep the Kansas economy competitive. KU and its Institute for Public Policy and Business Research have offered an annual economic outlook conference for the state for 23 years, but this year's conference was enhanced by the sponsorship and involvement of Gov. Bill Graves. John N. Yochelson, president of the Council on Competitiveness, based in Washington, D.C., is the keynote speaker.

For more information about the economic innovation summit, contact Pat Flory at (785) 864-4790.

The "Kansas Economic Outlook" presents historical data and a forecast for the state of Kansas generated by the Kansas Econometric Model, which is an ongoing project of the KU Institute for Public Policy and Business Research. The publication also includes data from a national forecast generated by the Econometric Model of the United States, developed at Indiana University.

Some highlights of the summer report's sectoral job forecasts are:

• Job losses in the mining sector in 1998 will be repeated in 1999 and 2000 because of continued weakness in the oil and gas extraction sector;
• Job growth in durable goods manufacturing fell during the first quarter of 1999, and slower growth is expected to continue during the forecast period as growth in the major sectors levels off. Job growth in non-durable goods manufacturing, which dipped in 1998, should begin to recover in 1999 and be even stronger in 2000, although continued weakness in printing and publishing remains a concern;
• The strong job growth in the transportation and utilities sector during the last two years will continue with increases of 4.2 percent in 1999 and 3.2 percent in 2000;
• Average job growth will continue in the retail trade sector, with increases of 3.6 percent in 1999 and 2.9 percent in 2000. Job growth in the wholesale trade sector nearly stopped during the second half of 1998, and the sector is expected to experience only modest job increases during 1999 and 2000;
• The strong job growth in the finance, insurance and real estate sector during the end of 1998 and first half of 1999 will slow during 2000;
• Although job increases in the service sector will not match the strong rates of growth in late 1997 and early 1998, they will continue to be well above 4 percent throughout the forecast period;
• State and local government job growth will continue in the 1 to 2 percent range; federal government employment will decline in 1999 and increase slightly in 2000.

Contact: Bunny Smith, University Relations, (785) 864-8860