Year Mining Predicted 1969 4278 4073.32 1970 3827 3970.205 1971 3655 3697.398 1972 3716 3488.696 1973 3586 3517.565 1974 3863 3674.646 1975 4087 4099.464 1976 4266 4384.758 1977 4619 4775.638 1978 4985 5226.853 1979 5577 5606.42 1980 6365 6589.339 1981 7628 8115.275 1982 7592 7917.887 1983 7696 7399.968 1984 8152 7745.596 1985 8135 7393.599 1986 5827 5827.355 1987 5435 5565.861 1988 5170 5338.305 1989 5078 5114.52 1990 5344 5358.333 1991 · 5383.431 1992 · 5359.506 1993 · 5418.542 1994 · 5447.411
Mining employment in southwestern Kansas reached its highest level in 1984-85, just prior to the energy price collapse of 1985-86. Southwestern Kansas mining employment is predicted by two variables; the Institute for Public Policy and Business Research (IPPBR) forecast of statewide oil and gas employment, and a trend variable (time). Over 96% of the variation in southwestern Kansas mining employment is accounted for by the two predictor variables. The average of the square root of the sum of the squared forecast errors (RMSE) is 281, which is less than 6% of the most recent level of mining employment. Employment in this sector is expected to remain relatively constant. In 1994, 5447 persons are expected to be employed in southwestern Kansas. For a while in late 1993, it appeared than Congress would consider a bill which would reduce the taxes of oil and gas producers, which, by increasing the after-tax return to exploration, would increase mining employment. However, the bill was never introduced, so the forecast (of little increase in mining employment) is appropriate, barring unforeseen price increases.
Year Construction Predicted 1969 5073 4870.991 1970 5032 4717.497 1971 4137 4711.214 1972 4441 4971.853 1973 4859 5411.829 1974 5244 5592.337 1975 5841 5608.969 1976 6451 6042.673 1977 6571 6405.681 1978 6166 6487.241 1979 6358 6674 1980 6232 6114.321 1981 6525 6172.443 1982 6605 5768.516 1983 5896 5751.406 1984 5970 5942.011 1985 5649 5573.691 1986 5319 5565.087 1987 4836 5608.931 1988 4882 4910.436 1989 5055 4675.83 1990 5297 4862.042 1991 · 5025.577 1992 · 5365.07 1993 · 5455.015 1994 · 5655.153
In the last thirty years, construction employment in southwestern Kansas has varied from 4,137 persons in 1971 to 6,605 persons in 1982. The growth in the 1970s and early 1980s is due to the energy boom of that period, and the housing requirements of the energy boomers which entered the region. Currently, another boom, although of a different sort, is underway in southwestern Kansas. New housing is required for the influx of workers in the expanding nondurable goods manufacturing industry and its associated businesses. In Dodge City, for example, machinists and metal fabricators recruited from Lubbock, Texas, along with immigrating workers in the red meat industry, have created an increase in demand for housing in the $60-$85,000 range that the existing stock cannot accommodate. Consequently, new home construction in Dodge City is expanding rapidly; so rapidly that many homes are sold before completion. Construction employment in southwestern Kansas has increased since 1987, bottoming and recovering in advance of statewide employment in this sector. Since 1989, regional employment has done better than the prediction model forecast, which is based on statewide construction employment (in addition to statewide Federal government employment). However, less than 70% of the variation in southwestern Kansas mining employment is accounted for by the two predictor variables. It is likely that the recent trend will continue in 1994, and that construction employment in southwestern Kansas will exceed the forecast value of 5,655 persons.
Year Services Predicted 1969 13959 13888.83 1970 14203 14130.631 1971 14302 14244.386 1972 15390 14985.807 1973 15715 15995.595 1974 16144 16439.324 1975 16258 16570.59 1976 17214 17206.795 1977 18093 18137.158 1978 18606 18546.262 1979 18533 19385.794 1980 18780 19267.807 1981 19340 20168.027 1982 20131 19824.294 1983 20739 19890.752 1984 21323 20687.656 1985 21660 20816.101 1986 21380 21181.915 1987 21841 21553.76 1988 22119 22140.82 1989 22766 22888.958 1990 23145 23689.737 1991 · 24134.177 1992 · 24684.47 1993 · 25401.357 1994 · 26329.292
Service employment in southwestern Kansas is a steadily growing sector. In only one year in the last thirty did service employment decline, the regional recession year of 1986. The service sector may be both a follower and a leader, in terms of job growth. As general business conditions improve in a region, increased demand for the services of accountants, lawyers, innkeepers, restaurateurs, doctors, nurses, medical specialists and nursing aides increases - but with a lag, as a secondary result of the initial employment impulse, rather than a primary cause. However, once service employment is in place, it also tends to remain in place. In addition, the requirements of both business and consumers for services seems to increase over time. More information, better health care, and faster meals increase the demand for services. This is a direct cause of increased service employment. In southwestern Kansas, service employment is predicted by three variables; statewide service, nondurable manufacturing, and federal government employment. Over 97% of the variation in southwestern Kansas service employment is accounted for by the three predictor variables. The RMSE is 498, which is 2.5% of the most recent level of service employment. The model predicts that service employment will grow by approximately 930 persons in 1994, to a level of 26,329.
Year Manufacturing Predicted 1969 5092 4937.384 1970 5082 5645.66 1971 5358 5739.382 1972 6072 6510.044 1973 6951 6977.115 1974 7843 7252.9 1975 7576 6825.063 1976 8076 7098.776 1977 8031 8349.983 1978 8164 8434.881 1979 8711 9232.608 1980 9055 9381.633 1981 9517 9950.016 1982 9888 9919.603 1983 10297 10077.284 1984 12230 11431.893 1985 12536 12076.232 1986 12248 12418.559 1987 12304 12541.57 1988 12859 13100.515 1989 13286 13228.242 1990 13731 13777.659 1991 · 13819.666 1992 · 14363.563 1993 · 14634.049 1994 · 15421.915
Nondurable manufacturing employment is a large and rapidly growing component of the employment fortune of southwestern Kansas. Since the end of the 1974-75 recession, the only year of decline was the 1986 regional recession. Since then, manufacturing employment has grown at a compounded annual rate of 4% per year. It shows no signs of decreasing; if anything, the trend is growing, and in 1994 should be the primary cause of many additional jobs, not only in nondurable manufacturing itself, but also in related industries such as services, metal fabricating, and construction. The expansion of HyPlains Beef L.C., and their entry into the boxed beef market, will account for more than 500 additional jobs in Dodge City. The additional services, construction, and durable manufacturing will add approximately 800 more. Add to that the increased activity of businesses which serve the transportation of live cattle and finished product into and out of the region, and businesses which serve live cattle production in the region, and the employment outlook for southwestern Kansas becomes quite rosy. In southwestern Kansas, manufacturing employment is predicted by two variables; statewide forecasts of durable and nondurable manufacturing employment. Over 97% of the variation in southwestern Kansas manufacturing employment is accounted for by the predictor variables. The RMSE is 478, which is 3.5% of the most recent level of manufacturing employment. The model predicts an increase in employment of approximately 800 persons in 1994, to a level of 15,422 persons. In light of the planned expansions already underway, it is reasonable to expect that the forecast is too pessimistic, and that the actual growth will be approximately 50% greater than the model indicates.
Year Transport/PU Predicted 1969 5024 5504.132 1970 5248 5487.622 1971 5332 5387.508 1972 5626 5512.153 1973 5761 5666.211 1974 5887 5746.922 1975 6021 5740.534 1976 5980 5838.166 1977 6273 6116.832 1978 6417 6286.071 1979 6518 6536.388 1980 6696 6721.496 1981 6823 7127.193 1982 6999 6947.582 1983 7113 6804.479 1984 7291 7116.956 1985 7063 7091.289 1986 6804 6757.507 1987 6515 6695.464 1988 6558 6728.883 1989 6665 6689.585 1990 6697 6808.026 1991 · 6791.077 1992 · 6832.746 1993 · 6857.098 1994 · 6945.191
Transportation and public utility employment is a stable to slowly growing source of employment in southwestern Kansas since the 1984-87 loss of 800 jobs occurred. Increases in productivity will probably limit the growth of this sector in the future. Although parts of the region are well suited for specialization in landfill development and waste disposal, political limitations on private resource uses probably preclude the development of these industries, at least for the foreseeable future. In southwestern Kansas, transportation and public utility employment is predicted by two variables; statewide forecasts of nondurable manufacturing and oil and gas extraction employment. Over 90% of the variation in southwestern Kansas transportation and public utility employment is accounted for by the predictor variables. The RMSE is 202, which is 3% of the most recent level of transportation and public utility employment. The model predicts an increase in employment of approximately 90 persons in 1994, to a level of 6945 persons.
Year Proprietors Predicted 1969 29385 29095.613 1970 29228 29710.295 1971 29315 29872.234 1972 30721 29870.227 1973 29871 29664.157 1974 29633 29685.777 1975 29069 29598.897 1976 29300 29672.513 1977 29733 30110.736 1978 30078 29856.215 1979 30497 29933.329 1980 29816 30192.045 1981 30172 30500.43 1982 30931 30933.5 1983 32733 31101.411 1984 · · 1985 · · 1986 32113 31940.283 1987 32048 31987.063 1988 31865 32123.356 1989 31791 32118.011 1990 32017 32349.908 1991 · 32404.518 1992 · 32687.713 1993 · 32840.626 1994 · 33235.21
The number of proprietors (persons who own and operate their own, usually small, businesses) in southwestern Kansas is large, stable, and expected to continue to remain so. Many times, the number of proprietors increases when people lose relatively high paying jobs, and have both the means and desire to work for themselves. Many of them open franchised service businesses, such as copy centers, ice cream stores, restaurants, and the like. Sometimes downsizing companies urge their employees to leave the company and form their own consulting proprietorships. However, neither of these cases apply to southwestern Kansas; businesses are "upsizing" rather than becoming smaller. The number of proprietors does not indicate growth, and the current boom in the region makes growth unlikely. In southwestern Kansas, the number of proprietors is predicted by two variables; statewide forecasts of durable and nondurable manufacturing employment. Approximately 76% of the variation in the number of southwestern Kansas proprietors is accounted for by the predictor variables. The RMSE is 572, which is 1.8% of the most recent level of proprietors . The model predicts an increase in the number of proprietors of approximately 400 persons in 1994, to a level of 33,235 persons.
Year WHOLESALE Predicted 1969 2865 3213.368 1970 3002 2982.561 1971 2756 2733.147 1972 2767 3258.245 1973 3385 3762.569 1974 3481 4102.433 1975 5923 4512.61 1976 6189 5327.965 1977 6655 6224.645 1978 6948 6911.447 1979 7283 7512.577 1980 7553 7698.407 1981 7943 7988.672 1982 7625 7173.574 1983 7064 6859.977 1984 7293 7665.926 1985 7155 7346.677 1986 6653 6834.29 1987 6336 7063.918 1988 6512 6532.202 1989 6604 6336.424 1990 6931 6881.366 1991 · 7122.649 1992 · 7954.048 1993 · 7964.581 1994 · 7770.145
During the energy boom of the 1970s wholesale trade employment in southwestern Kansas increased dramatically, more than doubling in four years. Since 1981, however, this sector has lost employment, declining by 1000 persons, or approximately 13% in the 1980s. There is little evidence of anything more than modest growth in the series' recent past. If the robust expansion of business activity in the region continues, however, the rate of increase in wholesale trade employment should rise. In fact, the increased construction in southwestern Kansas has recently resulted in new lumber supply and wholesale building trade employment in the region. In southwestern Kansas, wholesale trade employment is predicted by three variables; statewide IPPBR forecasts of Kansas oil and gas extraction, construction, and state and local government employment. Over 92% of the variation in southwestern Kansas wholesale trade employment is accounted for by the predictor variables. However, the RMSE is 524, which is 7.5% of the most recent level of wholesale trade employment. The model predicts a decrease in employment of approximately 200 persons in 1994, to a level of 7770 persons. The predicted decrease is due to the large forecasted decrease in state and local government employment in the IPPBR model. If it does not occur, or if the regional model is erroneous, the predicted decrease in regional wholesale trade employment will also be wrong. A more realistic prospect is for a small but positive change in regional employment in this sector.
Year RETAIL TRADE Predicted 1969 16768 17008.728 1970 17508 17100.884 1971 17399 17166.293 1972 17683 17411.204 1973 17779 17838.986 1974 18941 17808.501 1975 16563 17720.082 1976 17535 17832.253 1977 17494 18152.524 1978 17794 18105.908 1979 18238 18344.677 1980 17812 18113.452 1981 18351 18623.441 1982 18935 18446.417 1983 18781 18365.766 1984 18947 18500.946 1985 18868 18380.337 1986 18212 18294.876 1987 17840 18218.331 1988 17725 18063.945 1989 18176 18032.165 1990 18371 18190.284 1991 · 18323.174 1992 · 18305.193 1993 · 18366.902 1994 · 18641.152
Retail trade is a large employment sector in southwestern Kansas, but it is volatile and in general slowly growing. The series peaked in 1984, when 18,947 persons were employed. But employment was almost as great in 1974 and in 1982. Since 1984, employment declined until 1988, then began to increase. Further increases are probable, given the housing and nondurable manufacturing boom in the region. But it is likely that the rate of increase will be small. The southwestern Kansas regional model has retail trade employment predicted by two variables; IPPBR forecasts of statewide nondurable manufacturing and federal government employment. The variability in the series is pronounced; only 42% of the variation in southwestern Kansas wholesale trade employment is accounted for by the predictor variables. The RMSE is 510, which is approximately 3% of the most recent level of retail trade employment. The model predicts an increase in employment of approximately 280 persons in 1994, to a level of 18,641 persons. The predicted increase is due to the forecasted increase in statewide nondurable manufacturing employment in the IPPBR model.
Year WAGE & SALARY Predicted 1969 66562 68548.825 1970 67480 69362.341 1971 67515 68811.365 1972 68464 71353.594 1973 72842 73862.752 1974 76984 73712.53 1975 78343 75468.087 1976 81775 77354.022 1977 83380 81537.603 1978 83076 83994.422 1979 87474 87268.326 1980 90995 90755.166 1981 92973 95587.491 1982 93806 93178.437 1983 92504 91027.326 1984 95144 94239.894 1985 94796 94332.546 1986 90677 91276.448 1987 90552 91735.223 1988 92107 92913.261 1989 93672 93548.52 1990 95035 96287.821 1991 · 97652.434 1992 · 99377.33 1993 · 99093.085 1994 · 98241.277
There are almost 100,000 persons earning wages or salaries in southwestern Kansas. Wage and salary employment shows increases until the national recession of 1981-82 and the regional recession of 1985-86. However, southwestern Kansas employment lagged the national recession, and did not decrease until 1983. It seems to have lagged the most recent national recession as well, with there being some doubt as to the existence of a regional recession at all. The 1985-86 period appears to have taken the place of the national recession in southwestern Kansas. The southwestern Kansas regional model predicts total wage and salary employment using three variables; IPPBR forecasts of statewide nondurable manufacturing, oil and gas extraction, and state and local government employment. Over 96% of the variation in southwestern Kansas wage and salary employment is accounted for by the predictor variables. The RMSE is 2053, which approximately 2% of the most recent level of wage and salary employment. The model predicts a decrease in employment of approximately 850 persons in 1994, to a level of 98,241 persons. The predicted decrease is due to the decrease in state and local government and oil and gas extractive employment in the IPPBR forecasting model. However, in view of the projected growth in red meat processing, trucking, manufacturing, construction and service employment in the central cities of southwestern Kansas, it is appropriate to view the predicted decrease with some skepticism. A more likely scenario is much rosier, and a prediction of further increases in wage in salary employment seems appropriate.
Year F.I.R.E. Predicted 1969 3487 3639.699 1970 3562 3644.523 1971 3594 3526.444 1972 4019 3812.365 1973 4125 4108.146 1974 4060 4244.097 1975 4106 4168.578 1976 4412 4311.788 1977 4762 4770.279 1978 4977 5014.895 1979 5301 5423.035 1980 5736 5597.237 1981 5887 6077.843 1982 5820 5798.457 1983 5914 5646.805 1984 6038 6176.375 1985 6225 6210.959 1986 6033 5903.103 1987 6113 5853.369 1988 6128 5973.969 1989 5884 5959.26 1990 5827 6148.773 1991 · 6128.724 1992 · 6226.377 1993 · 6276.408 1994 · 6450.085
Finance, Insurance and Real Estate (FIRE) employment in southwestern Kansas shows a pattern similar to other series - until 1985. Since then, employment has not increased along with other categories, hovering at or under 6000 persons. The reason may be the consolidation in banking and financial services, the savings and loan debacle, and the paucity of opportunities in real estate servicing, as savers' preferences have shifted from real to financial assets. As financial intermediaries have found it profitable to make fewer loans and buy more securities, the need for lending officers and supporting personnel has declined. Current developments point to recovery in this sector. The tight housing conditions in the region and the increased construction activity point to an increase in exchanges of the housing stock. Rising prices of financial assets, both equities and debt, together with constant or falling prices of real assets, sooner or later will lead to substitution in savers' portfolios. Banks and other intermediaries are shifting away from securities purchases, returning to their core businesses of lending to consumers and commercial borrowers, as yields fall, and prices and riskiness of securities increase. The southwestern Kansas regional model has FIRE employment predicted by two variables; IPPBR forecasts of statewide nondurable manufacturing and oil and gas extraction employment. Over 97% of the variation in southwestern Kansas FIRE employment is accounted for by the predictor variables. The RMSE is 163, which is less than 3% of the most recent level of FIRE employment. The model predicts an increase in employment of approximately 175 persons in 1994, to a level of 6450 persons. The predicted increase is due to the forecasted increase in statewide nondurable manufacturing employment in the IPPBR model. In view of the foregoing, the forecast seems appropriate.
Year STATE & LOCAL Predicted 1969 12826 11963.743 1970 12970 12399.637 1971 13299 12640.555 1972 13174 13355.465 1973 13043 13869.798 1974 13432 13543.718 1975 14037 14080.461 1976 14094 14417.746 1977 14245 15040.772 1978 14631 15310.824 1979 15282 15679.485 1980 15517 16064.954 1981 15593 16073.918 1982 15705 15817.312 1983 15930 15686.208 1984 15982 15862.134 1985 16216 16159.08 1986 17112 16696.944 1987 17470 17201.191 1988 18123 17679.666 1989 18731 18167.105 1990 19081 18782.286 1991 · 19372.816 1992 · 19946.537 1993 · 19778.455 1994 · 19220.421
Approximately 20% of wage and salary employment in southwestern Kansas
is due to state and local governments. School teachers, administrators
and staff, fire and police department employees, public works, state, county
and city road workers, as well as others; all are important sources of
job growth. The growth in the series is both large and stable, increasing
from 12,876 in 1969 to 19,081 in 1990, which amounts to 48% for an annual
compound growth rate of approximately 2% per year. The growth rate is even
larger in the last half of the 1980s, increasing to 3.3% annually. Since
the growth rate in total wage and salary employment was virtually zero
(.05% annually) over the same five years, the importance to the region
of the large increase in state and local government employment is evident.
Such a disparity in growth rates cannot continue forever; if it did, then
early in the next century everyone in the region would be a government
employee. A good deal of the past increase may be due to state and federal
mandates (both funded and unfunded) which require the hiring of such employees
as education specialists, program compliance officers, health and human
service providers, and the like. Population shifts in the region, away
from small towns and rural areas toward central cities leads to more hiring
than firing in aggregate. In addition, the increased demand for services
that nonfederal governmental units provide is difficult to meet with productivity
gains, and therefore must be met by hiring more people. There is some evidence
that the growth rate is decreasing, and since logically it must, this source
of employment, although exhibiting a stable and powerful trend in the past,
should not be counted on for future growth. The southwestern Kansas regional
model has state and local government employment predicted by one variable;
the IPPBR forecast of total Kansas state and local government employment.
Approximately 93% of the variation in southwestern Kansas state and local
government employment is accounted for by the predictor variable. The RMSE
is 503, which is less than 3% of the most recent level of state and local
government employment. The model predicts a decrease in employment of approximately
550 persons in 1994, to a level of 19,220 persons. The direction of change
may be correct, but the size of the decrease is likely to be less than
that in the immediate future. Look for employment in this sector to fall
by less than 100 in 1994, but expect the rate of decrease to rise in 1995.
Note: The Institute for Public Policy and Business Research (IPPBR) 1994
Kansas forecast values used in this article are created by calculating
a simple average of the four most recent quarterly (annualized) forecasts.
The regional forecasting model uses a subset of the IPPBR employment forecasts
to drive a multiple linear regression model. Thanks are due to Norman Clifford
of the Institute for providing the statewide forecasts, and to Mike Berry
and Duane Trauer for insights into regional business and agricultural conditions.
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