Economic Forecast: Mixed Signals by Dennis Boone
Chris Courtwright, Kansas Legislative Research Department
Forecast: Partial clearing, with one dark cloud ahead

The Kansas Legislative Research Department was still framing last-minute analyses for the Legislature’s 2012 session when the Boeing Co. dropped its bomb: It would eliminate 2,100 jobs in Wichita by moving aircraft production closer to the Everett, Wash., headquarters.

“Things have changed in the last 24 hours with this Boeing thing,” Chris Courtwright said, brandishing a refined sense for understatement. Boeing’s announcement covers just part of the picture, he said, citing the potential for “an ancillary impact on the mom and pop machine shops that sell widgets to Boeing, Beech and Cessna.” Those suppliers could see an additional 2,100 jobs wither. The impact will be felt not just in income tax collections, but sales taxes as consumers in the state’s largest city tighten belts in response.

Shortly before that gut-punch, Courtwright’s department had improved its forecast for the state heading into 2012. Other indicators—the oil and gas industry and agriculture, in particular—marked the economic growth of Kansas over the previous two years, Courtwright said. But forecasters still anticipated that the rate of growth would decelerate as spring approached, given spikes in energy prices, continuing upheaval in the Middle East and the European debt crisis. “We still anticipate modest growth in the national and state economies” for 2012, he said, with state GDP of 4.3 percent for the year.

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