Wichita leaders want to diversify the area economy. Has there been progress?
One way to measure the concentration of an industry in a location is by the proportion of employment in that industry. The Bureau of Labor Statistics provides employment by industry for metropolitan areas. I’ve gathered the data for the Wichita MSA for two industries: Aerospace Product and Parts Manufacturing (NAICS code 3364) and all manufacturing. I’ve gathered this data for the Wichita Metropolitan Statistical Area and compare it to total private sector employment. This data is not adjusted for seasonality, as some is available only in that manner.
As the charts illustrate, there was a large shift in the two industry’s share of employment around the time of the Great Recession. Since then, the ratios have been more stable, with a slow decline until a small reversal of that trend over the last year.
The chart of employment ratio changes from the same month one year ago confirms: Manufacturing and aerospace employment has grown faster than total private employment in the recent year or so.
Another way to measure the concentration of an industry is through location quotients. The Bureau of Labor Statistics provides these, most notably for counties as part of the Quarterly of Census and Wages. 1 As described by BLS, “Location quotients are useful for studying the composition of jobs in an area relative to the average, or for finding areas that have high concentrations of jobs in certain occupations. As measured here, a location quotient shows the occupation’s share of an area’s employment relative to the national average.” 2
Further: “For example, a location quotient of 2.0 indicates that an occupation accounts for twice the share of employment in the area than it does nationally, and a location quotient of 0.5 indicates the area’s share of employment in the occupation is half the national share.”
This data is available by industry. I’ve gathered data for Aerospace Product and Parts Manufacturing (NAICS code 3364) for Sedgwick County and present it in a nearby chart.
First, note that the location quotient is large, 30 or more. This means the concentration of workers in this industry in Sedgwick county is over 30 times the concentration nationwide.
Second, the location quotient fell from 2007 through 2014. Since then, it has been steady.
Has the Wichita area diversified its economy? Based on these two measures, the answer is yes. That increased in diversity happened at the same time as a large decline in aviation-related employment, that decline being larger than the decline in all Wichita-area private-sector employment. That was not planned or desired. It was a result of worldwide trends. But since then, concentration in aviation-related employment has changed little and shows signs of increasing concentration.
- Bureau of Labor Statistics. Quarterly Census of Employment and Wages. Available at https://www.bls.gov/cew/datatoc.htm. ↩
- Bureau of Labor Statistics. Using Location Quotients to Analyze Occupational Data. Available at https://www.bls.gov/oes/highlight_location_quotients.htm. ↩