Nonfarm employment declined 0.8 percent to 6.3 million workers in the Great Plains through the 12 months ending February 2003. The manufacturing sector continued to post the largest job losses, down 2.9 percent to 820,000 jobs. Sharp declines also occurred in the construction and transportation industries. Decline in air travel has caused losses in the transportation sector, and the outlook for the short term is not positive. The financial problems at American Airlines, US Airways, and other major employers in this region, along with ongoing labor negotiations at American Airlines, remain major hurdles. A positive development in the region was the decline in the unemployment rate, which averaged 4.5 percent through February 2003 compared with 4.8 percent in 2002.

Single-family housing construction as measured by building permit activity continued to buck the trend of weakness in the regional economy. Single-family permit activity in the first quarter of 2002 totaled 10,352 homes in the region, an 8-percent increase compared with the first quarter of 2002. Increases occurred in most major metropolitan areas in the region, with St. Louis and Omaha recording the highest rates. In the Wichita metropolitan area single-family building permit activity for the first quarter was down 15 percent as the area continues to be hard hit by the decline in aircraft manufacturing.

Stimulated by low interest rates, sales of existing homes increased in most major metropolitan areas in the Great Plains through the first quarter of 2003 compared with 2002. Sales were up 10 percent in Omaha and 6 percent in St. Louis. Sales in Wichita remained flat, reflecting the impact of existing and announced layoffs of 17,000 workers at the area’s major aircraft manufacturers. The average listing time for existing homes sold in Wichita was over 4 months.

As a result of current market conditions multifamily permit activity in the Great Plains in the first quarter of 2003 declined more than 20 percent compared with first-quarter 2002 rates. Only the Kansas City metropolitan area recorded an increase in activity.

Balanced or soft conditions characterized the rental markets in the Great Plains region. As in other parts of the nation the weaker rental market reflects overbuilding, slower growth in renter households and demand, and a significant number of renters taking advantage of affordable prices and low interest rate financing to become homeowners. As of the first quarter it is estimated that the overall occupancy rate for apartments in the St. Louis metropolitan area was 92 percent. Absorption of new units has slowed significantly and local sources indicate that 70 percent of all residents who have moved out of apartments over the past year have bought homes. Kansas City’s occupancy rate has declined to 89 percent, and rent concessions are widespread with some developments offering 3 months’ free rent or trips to Florida in exchange for a 12-month lease. In Des Moines occupancy is 92 percent, and Omaha has registered a rate of 93 percent.