Wichita Update

Retail and Index

Jeremy HillNovember 2013

US headlines• U.S. auto sales continues to improve• U.S. real GDP grew by 2.8%• U.S. Employment grew by 204,000 in Oct,

which was above expectation• U.S. Small Firms shaken by shutdown

Forecasts2013 2014

GDP 1.6% 3.1%Consumer Spending 4.4% 5.8%Consumer Price Index 1.5% 1.8%Savings Rate 4.5% 4.8%Source: Moody's 11-22-13

Components: Current

• Wichita Non-Farm Employment– Bureau of Labor Statistics (CES)

• Wichita Unemployment rate– Bureau of Labor Statistics (LAUS) – seasonally adjusted by CEDBR

• Manufacturing Weekly Hours worked– Bureau of Labor Statistics (CES) – seasonally adjusted by CEDBR

• Manufacturing Earnings – Bureau of Labor Statistics (CES)– seasonally adjusted by CEDBR

Components: Leading

• Aircraft production index– Board of Governors - Federal Reserve System

• Kansas Leading index– Federal Reserve Bank of Philadelphia

• National production index– Board of Governors - Federal Reserve System

• International leading index – Organizations for Economic Co-Operation and

Development

WSU Current Conditions Index

Aug-13 Jul-13Monthly

% ChangeAnnual

% ChangeCurrent Conditions Index 92.9 92.4 0.5% 1.0%Index Components - Wichita MSATotal Non-farm Employment 287,200 286,200 0.3% 0.6%Unemployment Rate 6.4% 6.5% -0.1% -0.2%Hours of Production Employees* 44.9 43.8 2.5% 4.2%Earnings of Production Employees* $885.20 $869.11 1.9% 3.3%Source: Bureau of Labor Statistics, data compiled by CEDBR and seasonally adjusted

WSU Wichita Current Conditions Index

*Manufacturing Weekly Average

Summary - WSU Current Conditions

• The Wichita economy has improved slightly, but not solid consistent growth.

• Manufacturing appears to be poised for a recover, but employment is likely delayed for several more months.

• Although unemployment has come down slightly, the labor market has a long ways to go for recovery.

WSU Leading Conditions Index

Aug-13 Jul-13Monthly

% ChangeAnnual

% ChangeLeading Conditions Index 93.0 92.5 0.6% 1.1%Predicted change* 0.18 0.13 - -Index ComponentsAircraft Production Index 98.8 97.2 1.6% 0.1%Kansas Leading Index 1.4 1.0 40.0% 55.6%National Industrial Production Index 99.5 99.1 0.4% 2.8%International Leading Index 100.6 100.5 0.1% 0.9%

WSU Wichita Leading Conditions Index

Source: Board of Governors of the Federal Reserve System, Federal Reserve Bank of Philadelphia, Organization for Economic Co-Operation and Development (OECD), data compiled by CEDBR*Predicted change in the level of economic activity over the next six months from the current level of economic activity.

Summary - WSU Leading Conditions

• Aircraft production should continue to improve.

• International outlook is improving, and will start to spill over to the US.

Online Tool

• Index.cedbr.org

Wichita Economy

Questions

Retailers stockpile goods before the Holidays

Holiday Spending

• More consumers shopping mobile and local• Two-thirds plan to shop small business or

independent retailer• Top retail location are discount stores• Moderate gains this holiday (4-4.5% increase)• Number of expected gifts have leveled off

Source: Deloitte

Total Personal Income YR/YR

Source: BEA

2001Q1

2001Q3

2002Q1

2002Q3

2003Q1

2003Q3

2004Q1

2004Q3

2005Q1

2005Q3

2006Q1

2006Q3

2007Q1

2007Q3

2008Q1

2008Q3

2009Q1

2009Q3

2010Q1

2010Q3

2011Q1

2011Q3

2012Q1

2012Q3

2013Q1

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

United States Kansas

Total Personal Income YR/YR

Source: BEA

Wichita – Personal Income

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Personal income Nonfarm

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Wages and salaries Supplements to wages and salaries

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

-25.0%

-15.0%

-5.0%

5.0%

15.0%

25.0%

Wages and salaries Supplements to wages and salaries Proprietors' income

Nominal Taxable Retail Sales

1995:4

1996:4

1997:4

1998:4

1999:4

2000:4

2001:4

2002:4

2003:4

2004:4

2005:4

2006:4

2007:4

2008:4

2009:4

2010:4

2011:4

2012:4

2013:4

2014:4

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

Wichita Kansas Wichita ForecastedSource: CEDBR

Summary

• Retail sales will likely grow in the forth quarter• Sustained retail sales is not likely without

continued employment growth

Kansas 2013 REVIEWREVIEW

2014 FORECAST

Jeremy HillNovember 2013

CEDBRDATAWSU's Center for Economic Development and Business Research is a responsive, reliable source of local, state and national demographic and economic data.

KANSAS INFORMATION DATABASEThe Kansas Information Database (KID) is a set of data containing economically pertinent news articles and information on the state of Kansas and the Midwest region.

MARKET RESEARCHCEDBR provides customized market research to government, businesses and nonprofit agencies.Research.CEDBR.org

FORECASTSCEDBR provides employment and retail sales forecasts, as well as population projections.Presentations.CEDBR.org

CEDBR E-CONNECTIONCEDBR publishes e-connection, a monthly e-mail newsletter, providing ongoing reports on business and the economy, as well as timely delivery of special reports. Newsletter.CEDBR.org