KANSAS CITY, Mo. — An economic forecastby the Mid-America Regional Council (MARC) says the Greater Kansas City area is headed for a mild recession with many job losses impacting the construction industry.
“We expect construction will be hard hit, but also quick to rebound because we do expect that interest rates will come down, not next year, but the year after and as they do, construction will pick back up," Frank Lenk with the Mid-America Regional Council said.
The organization reports about 15,000 job losses in 2023. The economic forecast reports the Kansas City area is trailing behind the nation.
“What we say about Kansas City’s economy is doesn’t boom as high, but it doesn’t bust as low and that true," explained Lenk. "The problem is the periods of recovery are not booming as high, those last much longer than the periods where we’re not busting as low. We tend to be pretty short periods of no more than about a year or so.”
People in the construction industry are not surprised by MARC's economic forecast.
"I think it tends to be fairly well known in the industry. But many of the good sized companies have thought about it and prepared themselves for those things coming," said Mike Parks with Ryan Construction. "The 2008 recessions taught many good companies what they needed to figure out before it happened again and we were able to do that as well.”
Parks said the despite the expectations, the employment picture for the company still remains strong, but some changes will be seen in 2023.
"As a whole, projects may delay a month of two for starts in 2023, but we don’t expect any major changes for those projects," Parks said.
John McPherson, owner of JLM Construction says the company's outlook also still looks strong too.
“Sometimes I’m glad that I’m just a little bit smaller because I don’t have to worry about laying anybody off at this time," said McPherson said.
McPherson explained changes in the local economy are not a surprise.
“When I go into Home Depot and Lowes, it’s not as busy as it was this summer and when I go and see that it gives me a red flag,” said McPherson
McPherson added while he sees some struggles, he's confident about the future.
“As remodelers we’ll see a lot of people still wanting to do projects because they’ll like hey with this interest rate, I’m staying right here at home.”
Lenk with the Mid-America Regional Council said a mild recession could start in early 2023, but there could be a quick rebound in 2024 and a full recovery by 2026.
