Wednesday, May. 27, 2009

Reports offer just glimmers of hope

Kansans looking for signs of encouragement that the local economy is improving still have to look hard.

Recent reports on Kansas exports for 2008 and local home-building activity offer only glimmers of hope.

The Kansas Department of Commerce reports that exports set a record of $12.47 billion last year, up from $10.25 billion in 2007. Exports have grown in five consecutive years and set record highs in the last four. Adding another record year may be a challenge.

Although the overall export report is welcome news, some of the details are troubling and point to a more difficult time in 2009. Monthly exports in 2008 peaked at $1.3 billion in June and then slid steadily to $791 million in December—a decline of 39 percent.

Also, the Commerce Department speculated that the aviation industry, the state’s No. 1 export segment, is unlikely to repeat its 2008 performance following announced layoffs in the sector. Aircraft exports totaled a record $3.96 billion in 2008. Exports that had grown 315 percent from 2003 are predicted to fall as the industry absorbs its first big cuts since 2002-03.

Closer to home, the Home Builders Association of Greater Kansas City reports that governments across the metro issued 29 percent more permits for single-family homes in April than in March. Low mortgage rates and the $8,000 tax credit for first-time homebuyers appear to bringing some buyers back into the market.

Although permits are up month-to-month, for the first four months of 2009, permits in Johnson County are down 56 percent from a year ago, according to the HBA. Olathe’s permits are down 46 percent.

Granted, these two reports are only part of the overall economic forecast. And while the clouds may be starting to clear, they still are far from showing a silver lining.

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