Job losses, energy prices drag down Kansas economy

? The Kansas economy, dogged by job losses at aircraft manufacturers, will continue to slow through the second and third quarters, according to a new survey of supply managers and business leaders.

The overall index in the Mid-America Business Conditions Survey plummeted in March to 47.9 from February’s healthy 57.7.

“It now looks like the solid readings for January and February of this year were just improvements off of some very poor earlier readings,” said Ernie Goss, the Creighton University economics professor who conducts the survey.

In the nine-state Midwest region that includes Kansas, the index slipped to 53.7 from February’s 53.9.

Index numbers below 50 indicate a contracting economy and numbers above 50 indicate expansion.

Goss conducts the monthly survey in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Across the region, higher energy costs take the blame for the downturn. But in Kansas, that is compounded by job losses in aircraft manufacturing and related industries.

Since Sept. 11, 2001, the state has lost almost 16,000 jobs, with most of them in aircraft manufacturing. Because three of the state’s four largest employers are aircraft manufacturers, weakness in this sector will continue to weigh on the Kansas economy, Goss said.

Kansas Readings for March were 50 for both new orders and production, 46.2 for inventories and 38.5 for employment.

While the region’s employment index improved to 52.4 from February’s 48.1, the uptick came off a negative hiring environment for February.

March production was down to 57.3 from February’s strong 59, Goss said.

“While the confidence index declined slightly to 60.1, survey participants remain fairly optimistic about the economy six to nine months down the road,” Goss said. “However, a lengthy war with Iraq and additional increases in energy costs will take a toll on confidence in the months ahead.”