New spending on restaurants and travel in Wichita could return jobs in that sector to near pre-pandemic levels by the end of the year, and employment in aviation manufacturing could rebound faster than expected by the summer.
Those are among the findings of an updated employment forecast for Wichita’s economy from Wichita State University’s Center for Economic Development and Business Research.
Local employment in the Wichita area could increase by 3.1% from the end of 2020 to the end of 2021. That’s a jump up from the 0.7% employment growth the Center forecast in January.
WSU updates its job projections quarterly. Workers and businesses are watching closely this year after COVID-19 closures and health concerns induced a unique recession.
When the 2021 employment forecast was first released in October, it included room for a lot of uncertainty, said Jeremy Hill, director of the WSU Center. It was unclear when vaccinations against COVID-19 would be widely available.
“Now that we’re into May, the range of uncertainty narrowed down a whole lot,” Hill said. “So we’re feeling better about our forecast for 2021 because all those unknowns have become a lot more clear.”
The expected employment recovery in Wichita isn’t a given though. New, more contagious variants of COVID-19 and a slowing vaccination campaign could change the path, Hill said.
But heading into the summer, people have saved their money and are ready to spend it, said Hill. The third round of federal stimulus funds in March also bumped up job projections in retail and service higher than Hill expected in the January forecast.
Leisure and hospitality
Leisure and hospitality jobs could see the largest jump in local employment this year in the service sector, expanding 6.8% in the new forecast. The January forecast had it growing at 4.6%.
Any growth in that sector — which includes restaurants, entertainment and travel — is based on policy and vaccinations, Hill said. As markets open up and people feel confident going out again, it will drive jobs growth.
Overall, the service sector could add about 4,200 jobs by the end of 2021. That also includes health care, financial activities and professional and business services.
He cautioned that if consumers lose confidence because they have health concerns about coronavirus variants, it could shake up the forecast.
Regardless, he expects spending on restaurants and travel to return to near-normal levels by the end of the year.
“I don’t see a whole lot of exciting things going on here,” Hill said. “This is just bringing back those same jobs we had before.”
One concern Hill has for travel-related spending is how much of that Wichita will see compared to other travel destinations.
Many employees saved up vacation time last year when they stayed home and are ready to use it this summer, Hill said. If travelers venture out regionally and spend that money in Wichita, it will prop up local jobs. However, some of that demand could fuel jobs in other high-traveled vacation markets.
“The demand is high to have a vacation,” Hill said.
Production and manufacturing
In January, Hill’s forecast showed that durable goods manufacturing, which includes aviation, would see a continued decline in jobs. But now it’s expected to grow 2.8% through the end of the year as demand for commercial aircraft picks up.
Jobs in construction are also forecast to come back stronger than initially expected, growing 3.2%. That could exceed its pre-pandemic employment peak by the end of the year. Demand for residential construction is high in the Wichita area, driving that growth, according to the projections.
The production sector in Wichita, which includes both construction and durable goods manufacturing, could add 1,695 jobs overall by the end of the year.
Wichita’s manufacturing outlook typically differs from national trends. Manufacturing did well across the country in 2020 as people stayed home and purchased goods. Local manufacturing is heavily dependent on aviation, however, and didn’t see the same health as the rest of the country last year.
There’s reason to be more optimistic about jobs in aerospace this year, Hill said.
“That market looks so much better than it did before,” he said.
On the commercial side, big companies like Spirit AeroSystems and Boeing are seeing new orders, which eventually passes down to the supply chain. On the business jet side, things are looking good for Textron Aviation, which saw a promising first quarter of business this year.
“It won’t take a lot if aerospace picks back up,” he said. “That will drive all these other sectors.”
The companies are cautious about signaling whether or not they will hire workers back this year, but Hill thinks it’s possible.
“There’s definitely reasons to be optimistic about jobs this summer,” he said.
Retail trade, transportation and government
The Center forecast the trade, transportation, and utilities sector as the fastest growing in Wichita in 2021, expanding 4.2% and adding more than 2,000 jobs.
Employment in retail trade specifically could grow 4.5% as retail sales in the area regain some of last year’s declines.
“Both sectors are projected to recover significantly from their 2020 job losses but remain modestly below their pre-pandemic employment peaks,” according to the updated forecast.
Jobs in retail have changed over the last year though, in some cases transitioning to employment in transportation or other sectors. Positions are changing from grocery store cashiers to grocery delivery shoppers and drivers, for example.
“There’s some broader trends that shifted even more because of COVID,” Hill said. “Some of those are not going away.”
The pandemic has changed not only how consumers shop, but where they shop. Many people who spent money at big-box stores in the last year might now turn back to smaller, specialty retailers.
“I think there’s a lot of opportunity for smaller, independent businesses,” Hill said.
Employment in government jobs is also looking up. January’s forecast expected modest job losses in local government, while the updated forecast shows local government adding more than 700 jobs this year.
Overall, the employment forecast looks encouraging, Hill said. But jobs are still way below 2019 levels.
“There are still people that are struggling, concentrated in the hard-hit sectors” of leisure and hospitality, said Hill. “But they will get some relief.”