Economic forecast: region appears to be headed toward a mild recession

This recession is mainly due to the rapid rise in interest rates set by the Federal Reserve as it tries to cool the economy in order to contain inflationary pressures. While it seeks to only slow the economy, the level of interest rates required to rein in inflation is judged as more likely to cause national economic output to decline, taking the Kansas City economy with it.

The recession is expected to result in the loss of about 15,000 jobs over the course of a year and will impact the Construction industry the most, but forecasts show this industry also rebounds the quickest in 2024. The Manufacturing and Professional and Technical Services industries prove to be the most resilient sectors during the downturn and help lead the subsequent economic recovery

The recession is projected to begin before the region fully recovers jobs lost during the COVID-19 pandemic. As a result, full recovery is likely postponed until sometime in 2026, six years after the pandemic began.

Even while experiencing a recession, the region’s employers are likely to continue to scramble to find workers as the baby-boom generation ages out of the workforce and immigration levels remain low by historical standards. Improving the capacity of the region’s workforce system to upskill existing workers into more productive occupations remains a key strategy for both boosting the region’s growth potential and improving its resilience in the face of future disruptions.  

Additionally, the region continues to experience investments that should also allow it to better weather future storms. These include investments in three categories.

Attracting new visitors:

• Building the new Kansas City International Airport.
• Hosting the 2023 NFL Draft.
• Hosting 2026 World Cup games.

Growing new industries:

• Building a Panasonic battery plant.
• Advancing life science research at KU Medical Center, Children’s Mercy Hospital and University Health.

Creating a new, higher quality of life:

• Extending the KC Streetcar.
• Building a downtown baseball stadium

These investments have the potential to restructure the Kansas City economy, change its trajectory and accelerate its progress.