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Archive for Monday, September 27, 2010

Statehouse Live: Kansas economy recovering, economist says

September 27, 2010, 11:28 a.m. Updated September 27, 2010, 2:13 p.m.

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— It was one of those glass half-full, glass half-empty discussions.

An economist with the Federal Reserve Bank of Kansas City told Kansas legislators Monday that the state’s economy was slowly recovering from the worst recession since the Great Depression.

But several legislators on the House-Senate Committee on Economic Development and the president of a state economic agency were more pessimistic.

“The business confidence is at a real low,” said Sen. Julia Lynn, R-Olathe. “Their confidence in policies that are occurring now is not high,” she said.

Stan Ahlerich, president of Kansas Inc., said, “Businesses are sitting on their hands, waiting.”

But Alison Felix, economist with the Federal Reserve Bank of Kansas City, said, “I'm not quite as pessimistic as others today.”

Felix conceded business and consumer confidence in the economy is low, but it is higher than a year ago, she said.

She said that a slower recovery was expected from this recession than previous ones because of problems in the housing market.

She said several sectors of the Kansas economy are doing well, including agriculture and energy.

“What you need is time,” she said. There is less belief now that the country will experience a “double-dip recession,” she said. “Every recovery is a little bumpy,” she said.

The 10th Federal Reserve Bank district based in Kansas City, Mo., covers all of Kansas and all or parts of six other sates

U.S. gross domestic product increased 1.6 percent in the second quarter of this year, and is expected to grow from 2.9 percent in 2009 to 3.8 percent for this entire year, Felix said.

Since February, most job sectors in Kansas have grown, including a whopping 58 percent increase in construction jobs between February and May. This was due to two major projects -- the Keystone oil pipeline project that came through Kansas and construction of a military hospital at Fort Riley.

Healthy oil and agriculture prices are also helping the Kansas economy rebound, she said.

Comments

Richard Payton 4 years, 2 months ago

Alison Felix must have went over to the Ramada Inn and took part of the silver haired work-study session on marijuana to believe that we are not going to see a double dip recession. Business have to sit on their hands because business plans can't model in what the government throws at them next. Health care will be required and has some businesses wondering if this will get revised or repealed by 2014. CEO's are in a bunker down mode which stalls the hiring process. Many are awaiting the election results to determine any moves.

tlangas54 4 years, 2 months ago

It's very simple. The so-called experts won't have to tell us a thing when the economy REALLY recovers. We will all be too busy WORKING to care what they say. That day, apparently, is still a long way off.

kansasmutt 4 years, 2 months ago

Construction employment was down 500% last year and to see an increase of 58% from last year in the spring in Kansas says to me " IT SUCKS" The energy sector is seeing the best increase at the bottom line numbers due to the HUGE 80% price increase they have hit us all with in the last 18 months.

Comsumers are sitting tight becuse they don`t know if they are going to have a job in 2 months. Businesses are NOT putting on employees, infact most are shedding employees at an alarming rate. Both aircraft builders in Witchita just shed 1,300 workers last week. Three area NE Kansas manufaturing (large) companies are looking to cut employees by up to 30% this fall.

Things are getting worse, the double dip is starting to happen now and had started 3 weeks ago. Watch your stocks in the next 2 to 4 weeks, they are going to drop like a rock. State revenue is off as much as 60% again this month for Kansas and next month youl see it tank like a big fat rock.

The good news, This will be the bottom i think. Next spring things will come back very slow, but it will be a bit better. I think businesses will be so low on inventory , they are going to have to rebuild some, come spring. I think we are still in for some bank failures in this area, a few of the small to medium ones . People are starting to walk on homes and loans at an accelerated rate and that is going to start a trend.

Shardwurm 4 years, 2 months ago

Not to be pithy or anything but what do you mean by employment being down 500%? If all construction workers = 100 percent then being down 500% would mean negative employment wouldn't it? Down 60 percent or 80 percent I could buy...but being down 5 x the number of workers available?

Shardwurm 4 years, 2 months ago

'The economy can't grow when wages are so low and taxes are so high."

Fixed.

Carol Bowen 4 years, 2 months ago

The economy would have tanked with or without Bush and Obama. It was out of control. Trends were starting to appear in the late '90's. Growth was too fast and unsustainable. So was spending. There will be no quick fixes. Hunker down.

CountyResident 4 years, 2 months ago

People who do not think the economy is getting better need to turn off Fox News and get their business news from other sources. The Kiplinger Letter August report projects that the average growth in 2010 will be 3.1% and pick up to 3.6% in 2011.

President Obama, just yesterday, signed into law some really great tax cuts for businesses. Take advantage of these and see how your business might grow instead of always looking for something bad to happen.

avoice 4 years, 2 months ago

Our small business will not be taking advantage of those "really great tax cuts." Basically, this bill offers yet another incentive for businesses to get themselves into debt by purchasing equipment. Sure, you get to accelerate the depreciation, but then you have 4-5 years of paying off the huge loan you took out to buy the equipment, without the tax benefit of depreciation on it. It's buy-now-pay-later for businesses, just the same as all the buy-now-pay-later schemes for consumers. When you take the steady, balanced approach out of purchases, you end up with massive debt that keeps getting shoved under the rug until it balloons to the point that you can't hide it any more. That's where we are now. The only thing that can save small businesses is access to credit lines. For small business, a credit line is the same kind of lifeline that unemployment checks are to individuals. The problem is that banks want secured loans, so they want to give businesses money to buy things, not money to use to go out and get business. That's too nebulous for the banks, too risky. No credit lines = no cash flow = no purchasing = no hiring.

newmedia 4 years, 2 months ago

Probably a hard sell to those Cessna employees in Wichita.

CountyResident 4 years, 2 months ago

newmedia: They should apply for a job at Boeing. It was announced last week that Russia was buying 50 737's from Boeing at a cost of $3.7 billion. Boeing already has a backlog of 2,000 orders for its 737. Remember, look for the good news.

avoice 4 years, 2 months ago

Remember in the old days when one company (Cessna) would announce a lay-off and another company (Boeing) would announce a plan to hire a certain number of those who were being laid-off? Why hasn't Boeing announced such a hiring plan? Don't they need more workers, with all that backlog? Looking for the good news...

bliddel 4 years, 2 months ago

There is no good news.

There are potential solutions however. Persons with no sense of humor should stop reading now.

One very effective solution would be to round up all the unemployed people and simply exterminate them. Government could confiscate any tangible assets they might have had. That way, the legislators would get to spend lots more on re-election, and they wouldn't have to exempt themselves from the new law (like they would if we instead exterminated everyone over age 40).

True, unemployed people don't necessarily have the accumulated wealth that the over 40 crowd has, but it would eliminate unemployment almost immediately, and crematoriums would be an explosive growth industry.

I'm not saying there wouldn't be problems with this approach nor am I advocating for it. Hey! No plan is perfect.

Either way, I'm a dead person walking.

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