2020 Economic Forecast projects continued growth, but at a slowing pace

At the Economic Forecast Breakfast hosted by the Greater Kansas City Chamber of Commerce on Oct. 24, MARC’s Director of Research Services Frank Lenk presented the annual regional economic forecast for 2020.  The forecast analyzes the current state of the national and regional economies, and projects growth in GDP and employment by industry through 2021.

With 124 straight months of growth, the U.S. economy continues to be in its longest-ever recovery from a recession. Despite concerns about deceleration in the economy, the forecast finds that the combination of a strong labor market, low inflation and federal monetary accommodations mean a recession is not likely through 2021.

The region’s GDP will grow slightly faster than the U.S. from fourth quarter 2019 to fourth quarter 2020, with a 2.3% increase in Greater Kansas City compared to 2.2% nationally, due in part to additional stimulus provided by construction of the new airport terminal. Both the U.S. and metropolitan economies are expected to slow in the coming years, primarily because businesses are having difficulty finding workers when unemployment rates are at record lows. In the absence of any additional local economic stimulus, the region is projected to fall slightly behind the U.S. by the end of 2021, with 1.5% growth here compared to 1.6% nationally.

The forecast calls for continued job growth, although at reduced rates, across virtually all sectors of the Kansas City metropolitan economy. Over the two-year forecast period between the end of 2019 and the end of 2021, the forecast projects 29,300 new jobs, with 16,200 occurring in 2019-20 and 13,100 occurring in 2020-21. The health care industry is forecast to lead the way, with 6,000 jobs added from 2019-2021. Professional/technical services is forecast to add 4,500 jobs. Accommodation and food services will grow by 3,500 jobs while construction, in part due to the new KCI terminal, will add 3,000 jobs between fourth quarter 2019 and fourth quarter 2021. Information technology is expected to stabilize while finance and insurance is projected to add back roughly 700 jobs. Retail trade still loses jobs, but only about 500. While manufacturing won’t continue to grow in the face of slowing national and international economies, its losses are projected to be modest at about 600 jobs over the two-year period.