Kansas GDP down, but state fares better than most of country in first quarter of 2020

Capitol Bureau

TOPEKA, Kan. (KSNT) – The country’s economy suffered in the first quarter of this year, but Kansas was one of the states that was least affected.

Gross domestic product, or GDP, has been growing for years, but when the start of the coronavirus outbreak took off in March, it quickly stopped that trend.

GDP was five percent less than it was in the previous quarter. That’s the first time it didn’t grow in six years, according to the Bureau of Economic Analysis in the U.S. Department of Commerce.

The biggest decline was in arts, entertainment, recreation, accommodation and food services. Combined, those areas were 29 percent lower for the entire country compared to the fourth quarter of 2019.

“We stopped having all concerts, hotels aren’t booked, we had some hotels shut down for a period of time, restaurants were closed, all those things together,” said David Sollars, a Washburn University economics professor. “In some ways, I’m sometimes surprised we haven’t seen worse numbers.”

Sollars said many of those places aren’t big economic drivers alone, but together they contribute to a large part of the economy.

“You think about a restaurant here in Topeka, any given single restaurant is not a huge economic entity, even though they may employ 40, 50, 100 people depending on who they are, but you take all the restaurants in town and you put them all together you’re talking about thousands of people employed in that industry,” Sollars said.

Kansas hurt in those areas, but not as much as the rest of the country. High tourism spots like New York, Hawaii, and Nevada suffered mightily.

The state’s agriculture sector helped Kansas not fall behind other states. Many farming states in the Great Plains region kept disappointing numbers from being even worse.

Though many of the states in the region and farther west had better numbers, it’s still unusual to have every state change to negative numbers so quickly.

“What’s really remarkable here is that every state had a decline, usually when we have bad country-wide economy, there’s still some parts of the country that are growing, some parts are shrinking, it’s just that the shrinking parts are larger than the growing parts,” Sollars said.

He said many affected areas of the economy will eventually come back, but coronavirus has impacted somethings forever.

“It’s getting through that disruption period and getting back to more normal things, but you know somethings may not come back,” Sollars said. “We’re going to see some structural changes, obviously some businesses won’t come back.”

Sollars said recent job numbers should provide some optimism that the worst part of the economic effects because of coronavirus could be over.

To see the numbers yourself, click here.

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