By Don Bradley
Forecasting an economic outlook for a new year has never been an exact science.
Economists study data and projections, take the world’s vitals, do some math and try to get ballpark close.
Little harder this year with all the unknowns of the new administration’s “flood the zone” strategy blowing through the land.
- The country’s largest employer, the U.S government, is threatening to boot a good chunk of its three million-plus workers.
- Millions of undocumented workers, the bulk of labor for agriculture and some service industries, face deportation.
- And the U.S. is imposing import tariffs, which are designed to get people to buy American-made, on items not even made in this country.
Try crunching those numbers. But don’t use pennies.
With all the unknowns, you might hear an economist say on a specific line item, “I have no idea.”
Still, Chris Kuehl, a local Kansas City economist, as he’s done the past few years, provided The Telegraph with his best take on the country’s economic outlook, especially with how Kansas City stacks up.
Let’s talk housing.
Kansas City still has a pretty strong housing market, said Kuehl, the managing director and co-founder of Armada Corporate Intelligence.
“The area still has a shortage of mid-range and starter homes, but that’s a national problem,” Kuehl said.
He put those worths of those properties in the $250,000 to $450,000 range. Higher end homes are more readily available.
“People in a position to buy the more expensive homes can probably find what they’re looking for,” Kuehl said.
High interest rates continue to hobble both buyers and sellers in the moderate market.
J.P. Morgan forecasts home prices to rise 3 percent this year, and interest rates to ease only slightly to 6.7 percent.
Kuehl, a former economics professor, said the Kansas City market could change as trends show people leaving more expensive areas, such as New York and California, to places where living is cheaper.
“Nationally, the average cost of a home is $400,000,” Kuehl said. “Kansas City is a little cheaper.”
Commercial development appears to be a bright spot this year for the area.
Panasonic Energy North American will open a 300-acre manufacturing site in De Soto to make electric vehicle batteries.
The project is dubbed the largest economic development in Kansas history.
“There are a lot of other projects in full swing…up around the airport and in Blue Springs and Lee’s Summit,” Kuehl said.
“We’re not like Dallas, but Kansas City is seeing decent development in all directions.
“Right now, there is a lot of confusion with the tariffs on steel and aluminum. And all those government grants have basically been put on hold.”
As for prices of consumer goods, signs don’t offer much relief, particularly with tariffs and immigrant deportation.
“Bird flu, rising transportation costs, people who harvest the food leaving the country, yeah, prices will go up,” Kuehl said.
Unemployment should remain fairly low for the area.
“Kansas City still has lots of jobs,” Kuehl said. “We’re not a big manufacturing town, but Kansas City does have lots of transportation jobs.”
What effect would the much-talked-about elimination of government agencies and their thousands of jobs have on the economy?
“Absolutely no idea,” Kuehl said. “There is a lot of ‘we’re going to do this and we’re going to do that.’
“It’s easy to say that. Will it happen? I wouldn’t even venture a guess.”