Regional economy is improving as unemployment dips to 5.8%

Although the economies of Missouri and Kansas were hit hard by the pandemic, things are improving as unemployment drops across the area.

Creighton University’s August survey of supply managers and business leaders across the nine-state region finds the financial situation improving. The university’s Ernie Goss said the survey’s leading economic indicator for the region climbed.

“The index from that survey rose to its highest level in two years,” he said. “In fact, it was well above growth neutral at 60.0, and that’s up from July’s number of 57.4, so it was a good reading.”

Goss said the survey found manufacturing is steadily picking up, but it still has not fully recovered from the downturn caused by the coronavirus pandemic.

“Even despite the increases that we’ve seen over the last couple of months, we’re still below levels of production and overall economic activity in the regional manufacturing sector,” he said. “We’re still not back to pre-COVID levels but we’re moving in the right direction.”

The unemployment rate for the nine-state region hit a high of 9.7 percent in May and has fallen in the new August survey to 5.8 percent, but Goss said there’s still difficulty finding people to work.

“Four out of five of the manufacturers reported finding and hiring qualified workers restrains growth in the region in their companies,” he said. “Even despite the higher levels of unemployment, we’re still seeing companies having difficulties finding and hiring those qualified workers to fill open positions.”

The Missouri labor market continues to recover in July, following major job losses due to COVID-19 shutdowns earlier in the year. Employment, seasonally adjusted, increased by 52,200 jobs over the month. Over-the year job losses, though still substantial, have diminished as the economy has gradually reopened.

Missouri’s seasonally adjusted unemployment rate has now been either below or equal to the national rate for 65 consecutive months. The national unemployment rate was 10.2 percent in July. The estimated number of unemployed Missourians was 211,177 in July, down by 25,026 from June’s 236,203.

For Kansas the news is equally as good. The survey results state that, “The Kansas Business Conditions Index for August increased to 63.0 from July’s 59.2. Components of the leading economic indicator from the monthly survey of supply managers for August were: new orders at 73.6, production or sales at 71.1, delivery lead time at 58.2, employment at 67.8, and inventories at 44.2.

“According to U.S. Bureau of Labor Statistics, since the onset of COVID-19, the state’s manufacturing sector has lost approximately 13,000 jobs, a decline of 7.7% with transportation equipment manufacturing accounting for a large share of the losses,” said Goss.

–Alan Goforth | Metro Voice