Regional Activity

Great Plains

The rate of employment growth in the Great Plains region for the 12 months ending in August 1997 was 1.8 percent (representing 109,600 added jobs), compared with 1.7 percent for the comparable period a year earlier. Only Kansas, with a 2.9-percent growth rate, exceeded the national rate. Unemployment in the Great Plains region as of August 1997 had declined to 3.2 percent. The unemployment rate ranged from 2.3 percent in Nebraska (tied with North Dakota for the lowest in the Nation) to 3.7 percent in Missouri.

Missouri added the most jobs (39,600) in the region. The St. Louis economy grew at a 1.2-percent rate; however, unemployment is low, and employers report shortages of assemblers, skilled craftsmen, and semiskilled operators. Kansas continued its strong economic growth, adding 35,400 jobs for this period. Growth in aircraft and aircraft parts (15.3 percent), construction (4.6 percent), and State and local government (4.1 percent) led the employment expansion. The Kansas City and Wichita areas continued to experience labor shortages. Kansas City, Kansas, has a $90,000 JobLinks grant from the Federal Transit Administration to work with Johnson County in designing a subsidized transportation program to transport inner-city residents to suburban employers.

Iowa's annual rate of job growth slowed to 1.3 percent (18,400 new jobs), the lowest rate since 1992. Job losses continued for the second straight year in the meat-packing industry. Iowa Beef Packing, Inc. (IBP), is reducing operations in eastern Iowa and at one of its facilities in Council Bluffs. The downsizing at the two pork-processing facilities is part of IBP's plan to shift production to the South, where hog supplies are more plentiful.

Single-family building permit activity reached an 18-year high in 1996, with 43,350 units permitted. The market for new sales continued to show strength in 1997. Through September 1997 permits were issued for 31,323 units. Activity was down 9 percent from 1996's record levels, but still greater than levels in 1995. Existing home sales for the Great Plains were also very strong. As of the third quarter of 1997, the annual rate of existing home sales in the region had increased to 262,900 homes, a 6-percent gain over the same period in 1996.

Multifamily housing activity remained strong in the Great Plains region, with permits issued for 14,566 units during the first 9 months of 1997, a 1.7-percent increase over the same period in 1996. In Iowa activity through September was up 52 percent to 3,653 units due to a strong rental market in Des Moines.

Spotlight on Kansas City, Missouri-Kansas

The 11-county Kansas City metropolitan area has an increasingly diverse economic base. From 1992 through 1996, nonagricultural wage and salary employment increased by 98,200 jobs (12.6 percent). Of the 878,600 wage and salary workers in 1996, 17 percent were in goods-producing industries and 83 percent were in service industries. The largest employment increases have been in business services, health care, and trade. The unemployment rate was 3.4 percent in August 1997, considerably below the 4.1-percent rate in August 1996.

When the Kansas City airport was built in Platte County in the early 1970s, development was expected to follow. However, growth failed to occur on any significant scale until recently. Now Platte County has the fastest rate of growth in the metropolitan area. Expansion of business and light industrial parks has been accelerating, as has the development of hotels, restaurants, shopping facilities, service outlets, and medical facilities. As a result, sales and rental housing demand in the area have increased substantially.

Since 1990 Johnson County has accounted for a substantial part of the metropolitan area's employment gains. The gains are the result of continued development of office and industrial facilities that have extended south and west into former agricultural land. Newly announced developments include the Sprint Corporation's 3.9-million-square-foot campus in the southern part of the county and Allied Signal Commercial Avionics System's 520,000-square-foot facility in the rapidly developing Highway 10 corridor. Facilities that are vacated when these two firms move to their new facilities should be readily marketable in the tightening office and commercial market. Residential construction in Johnson County comprised 40 percent of the metropolitan area's activity in the 1980s and has been approximately 38 percent so far in the 1990s.

To aid revitalization efforts, Kansas City, Missouri, has been providing tax and other incentives for commercial and residential development in the older parts of the city, including the central business district (CBD). Among the many projects in the CBD are the recently approved bi-State tax-supported, $234-million renovation and conversion of the Union Railroad Station into a science museum and the proposed AMC Power and Light Entertainment District. The entertainment district, if approved, and the science museum should restore some of the luster that the CBD has been losing and help the city compete for convention business.

Single-family building permit activity in the metropolitan area for the first 9 months of 1997 totalled 7,146 units, down 5 percent from the comparable period in 1996. Although 1997 activity may not reach last year's 9,695 units, it is on pace to be the second highest year of the 1990s. Multifamily housing activity for 1997 through September totalled 3,360 units, making it the peak year of the 1990s.

Sales of existing homes in the metropolitan area totalled 16,657 units in the first 8 months of 1997, about equal to the volume for the same period of 1996. With 24,083 sales, surpassing 1995 by 11 percent, 1996 was a banner year. The median sales price has increased by slightly less than 8 percent annually during the past 2 years.

Rental housing occupancy rose from a low of 87 percent in the late 1980s to 94 percent in 1993 and remained at about that level until recently. With the increase in multifamily production in 1994, occupancy levels now have begun to decline. In addition, rent increases may fall to less than one-half of the 3- to 5-percent annual gain of the past 2 years. The impact will be felt mostly in Johnson County, Kansas, where more than one-half of the metropolitan area's recent apartment construction has occurred.

Both Kansas City, Missouri, and Kansas City, Kansas, have active programs to provide affordable housing assistance to low-income households using HUD programs. During the past 4 years, 438 households on the Missouri side and 165 households on the Kansas side have become homeowners through these efforts. Home construction is also being assisted on infill lots and in small subdivisions in both cities. The homes are produced and financed through partnerships of the cities, lending institutions, and community development corporations.

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