LJWorld.com

Topeka — Labor Secretary Jim Garner said Friday that the Kansas economy is starting to show the effects of rising energy prices and trouble in the credit markets.

Garner said that despite having an unemployment rate below the national average, Kansas wasn't creating as many new jobs as it did in 2007.

"This is a time of uncertainty with high energy and fuel prices, increasing food costs and a housing and credit crisis," Garner said. "We are already seeing an increase of continued unemployment claims each week compared to last year."

He said recent announcements by a construction equipment firm in Doniphan County and automotive supply company in Pittsburg that were cutting back employment or closing their doors were evidence of the slowdown.

However, aviation remains strong, Garner said.

Spirit AeroSystems said Wednesday that it will design and build the fuselage for the Cessna Citation Columbus at a new factory on its Wichita site. The company said it expects to invest about $260 million and create an estimated 700 jobs with more than a $42 million payroll over the next five years.

Labor statistics show that sales of existing homes in Kansas declined by 7.4 percent from 2006 to 2007. The national decline was 12.8 percent. Total building permits were off 21 percent in 2007, compared with 24 percent nationwide.

On the positive side, exports of Kansas goods and services were up 18.8 percent in 2007, led by aviation and vehicle manufacturing, processed foods and computer products.

Garner said that in 2007 Kansas experienced "robust" job growth in adding 25,200 jobs, a 1.9 percent increase, the biggest since 1998. Fueling the growth were expansion in the professional service sector, education, health care, trade, transportation and utilities.

The department is forecasting the Kansas unemployment rate to increase to 4.4 percent in 2008 and 4.6 percent in 2009 before rebounding. Garner described job growth expectations for the next two years as "modest."

From 2004 to 2014, the overall work force is expected to expand by 12.3 percent, he said. Health care, he said, is expected to continue to grow through 2014 and add 38,000 jobs during that period.

Garner said several new policies were working to keep more Kansans employed and helping business expand. He said the state's reduction in the unemployment insurance tax paid by employers meant that businesses were able to keep $78 million of their revenues in 2007, a figure that should grow to $90 million in 2008.