Regional employment continued to decline during the 12-month period ending November 2002. Overall nonagricultural employment fell 0.8 percent to 6.4 million jobs compared with November 2001. Manufacturing accounted for nearly 74 percent of regional job losses during this period, with jobs in this sector declining by 4 percent to 920,000. Transportation registered the second largest rate of decline, falling 2.3 percent to 386,000 jobs. Most economic sectors in the region recorded declines except for moderate increases in the service and FIRE sectors. The region’s unemployment rate during the 12-month period ending November 2002 was 4.4 percent compared with 4.1 percent during the same period in 2001.

With a nearly 8-percent decline, Wichita experienced the largest rate of manufacturing job losses among major metropolitan areas in the region over the 12 months ending November 2002. The St. Louis metropolitan area ranked second with a 4.3-percent decline in manufacturing jobs. Layoffs at Boeing aircraft facilities contributed to job losses in the manufacturing sector in both areas, but Wichita was particularly hard hit, with a layoff of 5,000 local employees in 2002. Transportation losses were caused primarily by continued layoffs at American Airlines of former TWA employees based in the St. Louis and Kansas City metropolitan areas. Layoffs at US Airways’ Kansas City hub also added to job losses in the region’s transportation sector.

Despite the somewhat sluggish economy, the Great Plains housing industry has remained healthy and has helped offset weakness elsewhere in the economy. A total of 46,480 single-family units were permitted in the region in 2002, up 8 percent compared with 2001. Most major metropolitan areas in the region registered increases in single-family permit activity during this period. Approximately 10,650 single-family permits were issued in Kansas City and 11,000 homes were permitted in St. Louis in 2002, up 9 and 11 percent, respectively, from the same period last year.

Existing home sales have been relatively strong in 2002 with most metropolitan areas registering slight increases. In the St. Louis metropolitan area, through the first 11 months of 2002 existing home sales rose approximately 2 percent and the median sales price rose approximately 5 percent to $127,000 compared with the same period ending November 2001. Existing home sales rose less than 1 percent during this period in Lincoln, Nebraska, while the average existing home sales price increased by nearly 5 percent. Omaha, Nebraska, recorded an increase of 7 percent in existing home sales, while the sales price increased by around 5 percent to $137,000. In the first 11 months of 2002, existing home sales were up approximately 3 percent in the Kansas City metropolitan area and the average sales price rose to $141,000 compared with the same period in 2001.

Despite a strong existing sales market, sections of the Kansas City metropolitan area have begun to record declines in sales prices. According to the Kansas City Regional Association of REALTORS^®, sales prices in 2002 declined in more than 40 percent of the ZIP Codes in the metropolitan area compared with 11 percent in 2001. This included Johnson County, Kansas, a traditionally hot market. Local sources attributed the downturn to downsizing at Sprint Telecommunications’ world headquarters as well as to overall sluggishness in the local economy.

Multifamily permit activity increased by 12 percent in the region to approximately 16,460 units in 2002. All States in the region experienced increases except Kansas, whose decline can be attributed to softer conditions in the Kansas City area’s rental market. The remaining metropolitan areas in the region all registered increases in permit activity.

Rental markets generally are balanced in the region with the exception of the Kansas City area. The rental vacancy rate has remained at 12 percent throughout 2002 because of an excess supply of apartment units and the weakening in the overall local economy. Johnson County, Kansas, and Jackson County, Missouri, have been most affected by the soft market conditions. Local sources do not expect the market to return to a more balanced condition for at least 2 more years.