Reflecting the national economic slowdown, the rate of employment growth remained low in the Great Plains region for the 12-month period ending September 2001. Total nonagricultural employment was up 1.4 percent to approximately 6.5 million as of September 2001. Employment in Nebraska remained unchanged, whereas employment in Missouri declined by 1.1 percent. Most jobs have been added to the services sector. Even the usually robust construction sector showed only a modest rate of growth, except in Kansas, where an 8-percent increase over the 12-month period was recorded.

Manufacturing employment continued to decline in all four Great Plains States. A loss of nearly 30,000 manufacturing jobs in Missouri in the 12 months ending September 2001 has contributed significantly to the decline in manufacturing jobs in the Great Plains region. Unemployment in the region increased to 3.7 percent as of September 2001 and is expected to increase during the next 6 months as expected layoffs occur.

The State of Missouri estimates that it could lose 12,430 jobs, primarily in St. Louis and Kansas City, as a result of American Airlines’ acquisition of TWA. In addition, downsizing at Boeing Aircraft will result in the loss of more than 2,000 jobs at the company’s facilities in Wichita, Kansas, according to a Boeing spokesman. Kansas also will be affected by Sprint’s recent announcement that the company is laying off 6,000 workers, or one-seventh of the company’s workforce, 3,000 of which will be in Kansas.

Total residential building permit activity declined 2.2 percent in the Great Plains region between September 2000 and September 2001. Single-family activity in the first 9 months of this year totaled more than 30,900, approximately equal to the volume for the same period of 2000. Increased activity in Nebraska and Missouri has offset slight declines in activity in Iowa and Kansas. Multifamily building permit activity in the region in the first three quarters of 2001 declined 8 percent to approximately 10,800 units. Only Kansas, where the number of multifamily units increased 45 percent because of activity in the Johnson County suburbs of the Kansas City metropolitan area, recorded an increase.

The most recent data indicate that the existing home sales market remains strong in the Great Plains region. As of the second quarter, the annual rate of existing home sales in the region had increased 6 percent to 284,600. Kansas led the region with the largest increase, 9 percent. All four States recorded an increase in the annual rate of existing home sales. All States recorded significant increases in the median sale price as well, ranging from 5 percent in Nebraska to 11 percent in Missouri.

The slowdown in multifamily building activity in the Great Plains region can be attributed, in part, to the slowdown in the economy and the subsequent decline in rental demand and softening rental market conditions. In the 2000 census, overall rental vacancy rates in the four States ranged from a low of 8 percent in Iowa to a high of 10 percent in Missouri.

Spotlight on Kansas City, Missouri-Kansas

The Kansas City metropolitan area economy has continued to expand but at a less rapid rate than in 2000. Nonagricultural employment in the 12 months ending September 2001 increased 2 percent in the period to approximately 1.01 million. Service industries and wholesale and retail trade account for more than half of the employment growth. The area’s current rate of employment growth could be affected adversely by anticipated job losses at TWA and by recently announced job cuts at Sprint. As a result of American Airlines’ purchase of TWA, TWA’s maintenance and overhaul facility in Kansas City could be closed. The State of Missouri estimates that 3,200 jobs could be lost if the facility is closed. In addition, Sprint Communications recently announced that 3,000 workers at its facilities in the Kansas City area will be laid off. As of September, the unemployment rate for the metropolitan area was 3.9 percent, and the rate is expected to increase during the next 6 months.

Despite the slowdown in the local economy, development is continuing in a number of sectors. Over the past 2 years, economic development activities in Kansas City, Missouri, have resulted in approximately 10,200 new jobs and the retention of another 3,000 jobs. Contributing to this business growth is the new $20 million Kansas City Southern Locomotive Maintenance Center located in East Bottoms. A joint venture between Kansas City Southern and General Electric, the facility will service 28 locomotives a day and 10,000 a year.

Housing permit activity has been up considerably this year. With 11,400 total units permitted through September, building activity in the metropolitan area has been on pace to surpass 1999, which showed a 20-year high. Single-family permit activity declined 4 percent to 7,228 during the period. Multifamily activity for the first 9 months of this year totaled 4,159 units.

A total of 23,300 homes were sold in the first 9 months of 2001 in the metropolitan area. New home sales totaled approximately 4,800, and existing homes totaled 18,500. New home sales, although strong, were down 6 percent, but existing home sales increased by 6 percent compared with the same period in 2000. Average sales prices for the period were $224,000 for new homes and $137,600 for existing homes, increases of 8 and 6 percent, respectively.

The overall rental market in the Kansas City metropolitan area has been softening since 1999 as new units entering the market have outpaced renter demand in the slower local economy. The current overall rental vacancy rate in the metropolitan area is 8 percent. The market is expected to become softer over the next 12 months, particularly in suburban Johnson County, Kansas, as recently announced layoffs take effect and units currently under construction enter the market.

Despite softer market conditions in suburban rental markets, demand remains strong for new rentals in downtown Kansas City, Missouri. In spring 1999, the city established a goal of 2,000 new and/or renovated residential units in the downtown area over the next 2 years and 10,000 units over the next 10 years. As of the third quarter of 2001, approximately 2,100 units have been completed or are under construction, according to local sources. Market reception has been very good for both sales and rentals. Three of the larger developments currently under way are the 400-unit Quality Hill apartments and townhouses located in the Quality Hill District; the $12 million, 83-unit Richards and Conover Lofts in the River Market area; and the $17 million, 160-unit Soho South Lofts in the Cross Roads District.