Big wheat crop boosts outlook for economy

? A good wheat crop, frequent rains and fewer layoffs have given state officials reason to believe the Kansas economy is beginning to rebound.

Yet most remained guarded in their comments, rather than boasting full-fledged confidence, because of previous hopes, later dashed, that the state and nation had seen the worst.

David Burress, a research economist at Kansas University, said he was “mildly optimistic.” But he has still not seen evidence of a general recovery.

“The wheat harvest was good and put money in the economy,” Burress said. “What it means is a bunch of farmers won’t go out of business.”

It also saves Kansas from a repeat of previous years, when the wheat crop has been dismal, hurting farm income and forcing many to rethink their operations.

Gov. Kathleen Sebelius said state revenues were improving, citing June tax collections that showed signs of strength.

“I guess I’m cautiously optimistic that we’re beginning to see a bit of the end,” Sebelius said.

Charles Reese, interim director of the Hays Chamber of Commerce, said farmers were breathing a sigh of relief, knowing that after years of frustration they finally caught a break.

Many are making purchases of new equipment or vehicles that they have been putting off for years, he said.

“I think they feel that it’s passing and that we’re moving ahead,” Reese said.

In addition, Reese said, manufacturing is beginning to slowly increase, though retail sectors aren’t seeing the increase yet. Merchants say people are taking a wait-and-see approach before buying.

“Perception is a lot of it. If you feel that it’s getting worse, it will,” Reese said.

Bill Layes, the state’s chief of labor market information, said the state economy was not likely to rebound as quickly as the recovery after the end of the 1991 recession. However, the slower growth would equate to real growth that can be more readily sustained.

“We’re not seeing the mass layoffs, other than what was previously announced by Cessna,” Layes said. “There are indications that firms are beginning to hire.”

Cessna laid off 6,000 workers for seven weeks beginning in May to adjust for declines in the aviation industry. The layoffs contributed to the increase in the state unemployment rate, which rose to 5.1 percent in June. The rate for the Wichita area, including Butler, Harvey and Sedgwick counties, rose to 7.6 percent, up from 5.7 percent in May.

Sebelius said the state would benefit if Boeing Co.’s Wichita operation landed a portion of the work on the company’s new 7E7 commercial jet, which would provide stability for both the company and the Wichita economy. A decision is expected to be announced by Boeing on the project later in 2003.

The governor said Friday she wanted to shift the focus of economic development by establishing seven distinct regions in the state. Policy and grants would be catered to the specific needs of those regions as opposed to what she called the current cookie-cutter approach.