The Great Plains region's nonagricultural wage and salary employment grew by 107,400 jobs during the 12 months ending in May 1997. This was the slowest rate of increase, 1.8 percent, since 1992. Kansas led the region with a 2.6-percent growth rate. Unemployment, which was already at a low rate of 3.8 percent in May 1996, fell to 3.3 percent in May 1997. All four States showed declines in unemployment, with Nebraska -- at 2.1 percent -- the lowest in the Nation.

Kansas had the fastest growing economy in the region and added 32,000 jobs over the 12-month period ending in May 1997. Manufacturing employment increased by 6,900 jobs, mainly due to growth in aircraft manufacturing in the Wichita, Kansas, area. The resumption of production of single-engine, piston-driven aircraft by Cessna has given rural Independence, Kansas, a major economic boost. The Independence plant is only 1 year old, but employment has already grown to 800 employees and is expected to reach 1,000 employees in September 1997.

Setting the stage for continued growth in the State, Burlington Northern-Santa Fe has completed a $95 million expansion of its Argentine railyard in Kansas City, Kansas. The yard is now one of the biggest in the country and one of four gateways to Eastern railroads. The expansion will allow the yard to sort up to 2,400 rail cars daily, triple its previous capacity. Another major economic development in the Kansas City area is the recent start of construction on Sprint's corporate office campus in Overland Park, Kansas. The $500 million project will consist of 20 office buildings surrounded by 13 parking garages. The 3.9 million-square-foot facility is scheduled to be completed in four phases over the next 4 years. The company will consolidate its 9,000 employees who are currently located in more than 50 buildings throughout the metropolitan area. Employment at the facility could eventually reach 12,000 jobs by the year 2001, according to the company.

The number of existing home sales in 1996 (247,300) was the highest of the 1990s in the 4-State region. As of the first quarter of 1997, the National Association of REALTORS^® reported an annual sales rate of 243,400 homes. Reflecting the slower rate of sales in early 1997, single-family building permit activity in the Great Plains region was down 9.7 percent (20,603 units) in the first half of 1997 compared with the same period in 1996. All States reported drops in activity, led by Missouri where permits were down 12 percent to 9,215 units.

Multifamily housing activity in the first half of 1997 was down 14 percent in the Great Plains region, dropping to 7,884 units. Iowa reported a 47-percent gain to 2,079 units. In Missouri the number of units increased 2 percent to 2,947. Apartment construction in Lincoln, Nebraska, has pushed the rental vacancy rate to about 5 percent, up from 3.1 percent in June 1996. In Omaha the 2,297 multifamily units permitted in 1996 exceeded any year since 1986. So far the new units coming on line are being absorbed well, and the rental vacancy rate has remained below 4 percent. Kansas reported the biggest drop in multifamily activity in the first half of 1997. The number of units was down 56 percent to 1,423 units. The big drop was in response to 5,007 units permitted in the State in 1996, the largest volume in the 1990s. Most of this activity was in Kansas City's suburban Johnson County market. The new apartment units in suburban Johnson County have been absorbed at a fairly rapid pace over the 12 months ending in June 1997. As a result of the firmer market and modest construction levels, occupancy in the St. Louis rental market has increased, and rent increases have averaged about 3.5 percent annually over the past 3 years. This improved market has led to an increase in rental housing construction. In 1996 permits were issued for 2,129 multifamily units -- the highest level since 1989. During the first 6 months of 1997, permits were issued for an additional 832 units.

Spotlight on Wichita, Kansas

Aircraft production is the dominant industry in the Wichita economy. As a result the area has one of the highest proportions of manufacturing employment (25 percent) of any metropolitan area in the Nation. Boeing, the world's largest commercial aircraft manufacturer, produces many components and parts for its civilian and military planes in Wichita. In addition Raytheon, Learjet, and Cessna produce general aviation and military aircraft. In 1996 the combined total of 36,000 jobs for all four companies accounted for 58 percent of manufacturing employment in the area and 14 percent of the area's total wage and salary employment.

From 1990 to 1995, employment in the aircraft industry dropped by 21 percent as a result of declining sales. Beginning in late 1995, orders for new aircraft started to increase, and by early 1996 the four companies were holding job fairs in an effort to attract workers. In 1996 employment in this industry increased by 4,700 workers (15 percent), and 2,800 workers were added in the first 5 months of 1997. Some industry sources expect that employment gains will be slower through the remainder of 1997, although Boeing recently announced plans to increase production companywide.

Although aircraft manufacturing dominates the local economic base, the area has been diversifying. As aircraft employment declined during the first 5 years of the decade, total wage and salary employment increased annually by 2,550 jobs, or 1.1 percent.

Wage and salary employment increased from 256,100 jobs in 1995 to 264,500 jobs in 1996, a gain of 8,400 jobs (3.3 percent). Growth was even greater in the first 5 months of 1997, as 9,000 jobs (3.5 percent) were added compared with the same period of 1996. These increases were largely driven by growth in the aircraft industry.

Single-family construction has been relatively steady in the Wichita area in the past 3 years, averaging approximately 2,500 homes annually. Multifamily housing production in the 1990s has averaged fewer than 300 units annually due to the lingering soft market that resulted from overbuilding in the 1980s.

With the improvement in the aircraft industry and low interest rates, home sales have continued to improve over the past 3 years. The Wichita Association of REALTORS^® recorded 7,580 home sales in 1996, the second-highest year of the past 14 years. Housing remains very affordable in Wichita, with an average sales price of $91,137 in 1996, a 3-percent increase from 1995. Home sales in 1997 are expected to continue at nearly the same pace as in 1996.

The rental market has also seen significant improvement during the past 3 years -- the vacancy rate declined to 8 percent in early 1997. A May 1997 survey of the 25 largest apartment complexes in the city of Wichita showed a 4.4-percent vacancy rate, down from 8.6 percent for the same period in 1994 and the lowest vacancy rate since the Fall of 1992. Rents have begun to rise to levels sufficient to make the construction of new units feasible.

The city of Wichita has been using the HOME program, low-income housing tax credits, historic tax credits, mortgage revenue bonds, and city funds to provide affordable housing to low-income owners and renters. One local program has helped 400 families become homeown-ers in the past 4 years. This program emphasizes moving tenants from public housing and other assisted-housing programs into homeownership. The average sales price of homes is $48,000. Another program assists families that have incomes below 50 percent of the area median income in purchasing rundown, inner-city houses. The city provides counseling to the families and up to $27,000 for housing repairs, and two participating banks provide mortgages on 95 percent of the unimproved value of the homes. Twenty-eight families have been approved to date.

HOME funds have been used to rehabilitate two former industrial buildings in the Old Town part of Wichita into 88 units of moderate-income housing; to construct a 23-unit rental property for people with disabilities; and to upgrade a 17-year-old, 100-unit Section 202 complex for disabled tenants. In addition a single-family housing development is under construction on the inner-city site of a former dilapidated rental complex.