The Great Plains region's nonagricultural wage and salary employment grew by 78,200, or 1.2 percent, from May 1999 to May 2000. Kansas led the region with a 1.9-percent rate of growth, followed by Iowa with 1.6 percent. The employment growth for both Missouri and Nebraska was less than 1 percent, due in great part to labor shortages in those States. Missouri's unemployment rate was 2.6 percent in May 2000, while Nebraska's was at 2.8 percent. Iowa has one of the lowest unemployment rates in the Nation, at 1.9 percent.
Homebuilding activity in the Great Plains declined slightly for the first half of 2000. Single-family building permits through June totaled 22,705 homes, down 5 percent compared with the same period a year ago. The Omaha, Kansas City, and St. Louis metropolitan areas all recorded decreases in single-family activity. Multifamily building permit activity for the same period increased approximately 23 percent to 8,574 units. Activity in the Kansas City was down, but activity in the Omaha and St. Louis areas was up. Most of the multifamily construction in the St. Louis area occurred in suburban St. Charles County, one of the fastest growing areas in the State.
The volume of existing home sales in the region remained strong through the first half of 2000, but volume declined 5.7 percent, compared with the first half of 1999, to 274,600 homes. A seller's market prevails in much of St. Louis. In St. Charles County, the median price of homes sold in the first 6 months of this year of $129,500 was up more than 9 percent compared with the same period in 1999.
In the Kansas City area, Sprint, with headquarters in Overland Park, Kansas, is the area's largest private employer. The proposed merger of Sprint and WorldCom, which has been called off, could have meant possible job losses had the two telecommunications giants consolidated operations. Sprint employs almost 4,100 people at its headquarters, and it is constructing a new campus in Overland Park, which is stimulating residential construction in Johnson County.
In St. Louis, the new $300 million Federal courthouse was completed in the Cupples Station redevelopment area of downtown. In addition, construction began recently on a $90 million Cupples Station office building complex and 800-vehicle parking garage. West of Cupples Station, construction started on the 292-unit Sheraton Hotel. It will contain hotel rooms, extended-stay units, and condominium units on the top two floors. Close by, groundbreaking recently took place on the first phase of King Louis Square, a $47 million HOPE VI mixed-income project that will replace the 44-year-old Darst-Webbe Public Housing Project. Darst-Webbe once contained more than 1,000 highrise public housing units. Approximately 650 mixed-income apartments and houses are planned for King Louis Square. The first phase of 152 mixed-income apartments is scheduled for completion at the end of 2001.
Spotlight on Wichita, Kansas
Since the resurgence of the civilian aviation industry in the mid-1990s, the economy of the Wichita metropolitan area has experienced a relatively strong rate of growth. From 1995 through 1998, nonagricultural wage and salary employment grew at an average of 2.8 percent annually. Aircraft manufacturing accounted for 16 percent of all wage and salary employment in the metropolitan area. The aviation industry (Boeing, Bombardier Aerospace-Learjet, Cessna, and Raytheon) employed more than 46,000 workers in the area in 1999, a 47-percent increase since 1995. In the 12 months ending in May 2000, wage and salary employment in the area remained unchanged. The overall labor market in the area was relatively tight, with the unemployment rate at 3.7 percent as of May 2000.
The local economy and the aviation industry got an important boost at the end of June when Southwest Airlines announced the purchase of 94 of Boeing's next-generation 737-700s. The order was the largest single order ever for the Boeing Company's smaller plane. As a result of the deal, valued at $4.5 billion, Boeing indicated that it would increase production by 17 percent at its Wichita facility, where the fuselage and parts of the tail section for the 737s are manufactured.
Single-family building permits increased steadily through the decade, from an average of 1,700 homes a year in 1990 and 1992 to more than 3,000 annually in 1998 and 1999. For the first 6 months of 2000, single-family permits were down 13 percent from the same period in 1999 to 956 homes. According to the Wichita Area Association of REALTORS®, residential sales in 1999 totaled approximately 9,600 homes. During the first 5 months of 2000, sales totaled 3,268 homes, down from 3,612 for the first 5 months of 1999. Sales prices increased a modest 1.4 percent from $103,000 in 1998 to $104,600 in 1999.
The rental housing market softened with the decline in the aviation industry in the early 1990s, and apartment vacancy rates reached 10 percent or greater. As a result of reduced apartment production, market conditions improved enough to stimulate increased multifamily building construction in 1997 and 1998. This new supply was too great, and the vacancy rate increased to 12 percent by January 2000, according to the Savage Company of Wichita. Multifamily building permit activity in the first 6 months of this year totaled only 26 units. The problems in the rental market are expected to be short lived, however, because the rebound in the aviation industry should bring the rental market back into a balanced condition within the next 12 months.
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