Kansas City: Economy

Major Industries and Commercial Activity

Both the geographic and population centers of the United States lie within 250 miles of Kansas City, making the metropolitan area a natural hub for intermodal transportation, warehousing, manufacturing, and distribution. The Kansas City area economy is a diverse one. The trade, transportation, and utilities category is the region's largest employer; government is second, followed by professional and business services, then educational and health services. Major manufacturing employers are Hallmark Cards (founded in Kansas City in 1910); Harmon Industries, Inc. (founded in Kansas City in 1946), manufacturers of railroad signal and communication equipment, traffic control systems, rail/highway grade crossing hardware and allied components; and American Italian Pasta, the largest producer of pasta in North America.

In addition to the federal and state governments, local employers with more than 5,000 workers include Sprint, Ford Motor Company, Kansas City School District, and the University of Kansas. A number of companies have made recent announcements to relocate significant operations or expand existing operations to the Kansas City metropolitan area. These include Federal Express, Wausau Supply, Procter & Gamble, and H&R Block.

Items and goods produced: grain mill products, roasted coffee, chips and similar snacks, meat products, bakery products, apparel, millwork and plywood, furniture, paperboard containers and boxes, converted paper products, commercial printing and publishing, drugs, soaps and detergents, agricultural chemicals, plastics, concrete, mineral wool, fabricated structural metal products, ordnance and accessories, industrial machinery and equipment, electronic/electrical equipment, motorvehicles, search and navigation equipment

Incentive Programs—New and Existing Companies

Local programs

The Kansas City Area Development Council is a bi-state, regional coalition of business, government, economic development, and chambers of commerce leaders. The council works with community partners to attract business and industry to the bi-state metropolitan area. Businesses locating within the Kansas City area are eligible for several incentive programs that, at the time of initial investment, offer direct cost reductions. Some of the programs also reduce annual operating costs. Businesses and individuals located in the metropolitan area are also affected by a tax structure that is quite favorable when compared to most regions of the United States. The Greater Kansas City Chamber of Commerce's Business Resource Center provides information for the research and business planning stage.

State programs

Businesses relocating to or expanding in the Kansas City area can take advantage of a wide range of financial incentives provided by state and local government agencies. These include state income tax credits, real and personal property tax exemptions, sales tax exemptions, financing programs, workforce training, and a number of other programs.

Job training programs

The New Jobs Training Program (NJTP) provides education and training to workers employed in newly created jobs in Missouri. The new jobs may result from a new industry locating in Missouri or an existing industry expanding its workforce in the state. In greater Kansas City, NJTP services are provided by the Metropolitan Community Colleges system. The program provides assistance in reducing the cost associated with expanding a workforce or locating a new facility through several training services, including customized training designed for the specific needs of the industry, adult basic education, general occupational skill training, and on-the-job training. The Missouri Customized Training Program (MCTP) helps Missouri employers with funding to offset the costs of employee training and retraining. It assists new and expanding businesses in recruiting, screening, and training workers, and it helps existing employers retain their current workforce when faced with needed upgrading and retraining.

Kansas City's Center for Workforce and Diversity Development, the hub of workforce development initiatives designed to seek solutions by building coalitions and collaborations to overcome workforce barriers. Initiatives include centralizing and supplying information about legislation and activities relating to the Welfare-to-Work program, child care and school-to-career initiatives; promoting diversity programs in the workplace; facilitating the metropolitan-wide Workforce Industry Consortia, where workforce issues are discussed and solutions created. Through the Workforce Industry Consortia, area businesses identify specific industry skill standards, gaps, and required training needs.

Development Projects

In 2004 Mayor Kay Barnes envisioned a "New Kansas City," driven primarily by development projects in the metropolitan area's urban core. More than $4 billion in major infrastructure improvements are planned, with work currently progressing on a $200 million expansion of the Nelson-Atkins Museum of Art, a $157 million Convention Center renovation and expansion project, and a $330 million entertainment district. Future projects include the new H&R Block headquarters, a Metropolitan Performing Arts Center, a Collegiate Basketball Hall of Fame, and Sprint Center, a $250 million sports arena slated for completion in 2007. Beginning in summer 2005, a new bus rapid transit system, the Metro Area Express (MAX), connects many of these destinations.

Since 2000, more than $500 million has been invested in new downtown residences, and another Sewer and Water Bond is being proposed to update the city's aging infrastructure and promote even more residential development.

Jim and Virginia Stowers have committed $300 million to build a second facility for the existing Stowers Institute for Medical Research; each facility will employ 500 people when staffed to capacity.

Economic Development Information: Greater Kansas City Chamber of Commerce, 2600 Commerce Tower, 911 Main St., Kansas City, MO 64105-2049; telephone (816)221-2424; fax (816)221-7440; email info@kcchamber.com. Kansas City Area Development Council, 2600 Commerce Tower, 911 Main St., Kansas City, MO 64105-2049; telephone (816)221-2121; toll-free (888)99KCADC; fax (816)842-2865; email kcadc@thinkKC.com. Economic Development Corporation of Kansas City, Missouri, 10 Petticoat Lane, Ste. 250, Kansas City, MO 64106; telephone (816)221-0636; toll-free (800)889-0636; fax (816)221-0189

Commercial Shipping

Located at the juncture of three interstate highways, four interstate linkages, and 10 federal highways, Kansas City is served by more than 300 motor freight carriers, including Yellow Corp., the nation's largest less-than-truckload carrier, which is headquartered in Kansas City. Kansas City is the third largest truck terminal in the United States. The second-largest rail center in the United States, Greater Kansas City is served by four of the country's eight Class I rail carriers, as well as three regional lines and one local switching carrier (Kansas City Terminal). Kansas City is connected via the Kansas and Missouri rivers to the nation's inland water system and is served by seven barge lines; 41 docks and terminal facilities exist in the metropolitan area. As an important inland port, Kansas City ranks first in the country in Foreign Trade Zones space. Kansas City International Airport (KCI) and four other airports in the metropolitan area are capable of supporting large cargo aircraft.

Labor Force and Employment Outlook

Employment in the Kansas City area economy increased by 20 percent during the 1990s, which ranked Kansas City among the fastest growing major Midwest labor markets. Unemployment, however, has risen steadily from 3.1 percent in 1999 to 6.2 percent in 2004. The Kansas City area labor force is said to be well-educated, motivated, and highly productive. Production workers in Kansas City take fewer sick days than workers in 33 major metros. Like the rest of the country, Kansas City has experienced a labor shortage; in the late 1990s this resulted in the loss of potential major employers to other parts of the country.

The local economy has managed to remain remarkably steady, largely due to its diversity; because it is not tied too closely to one particular industry, it is not subject to rapid economic peaks and valleys.

The following is a summary of data regarding the Kansas City metropolitan area labor force, 2004 annual averages.

Size of nonagricultural labor force: 965,900

Number of workers employed in . . .

construction and mining: 50,800

manufacturing: 83,700

trade, transportation and utilities: 202,200

information: 45,300

financial activities: 70,900

professional and business services: 127,700

educational and health services: 108,900

leisure and hospitality: 92,300

other services: 40,400

government: 143,900

Average hourly earnings of production workers employed in manufacturing: $20.65

Unemployment rate: 5.7% (February 2005)

Kansas City: Economy

Largest employers Number of employees
Federal government 29,452
Sprint Corporation 9,300
State of Missouri 8,987
Hallmark Cards, Inc. 6,900
A T & T 6,200

Cost of Living

Kansas City's cost of living has consistently been at or below the national average. A major component of the overall low cost of living is the affordability of housing in the area. In the first quarter of 2005, Kansas City was the second most affordable market among metropolitan areas with populations exceeding one million.

The following is a summary of data regarding several key cost of living factors in the Kansas City area.

2004 (3rd Quarter) ACCRA Average House Price: $228,375

2004 (3rd Quarter) ACCRA Cost of Living Index: 95.5 (U.S. average = 100.0)

State income tax rate: graduated from 1.5% to 6.0%

State sales tax rate: 4.225%

Local income tax rate: 1.0% of earnings

Local sales tax rate: 1.5%

Property tax rate: 1.32 per $100 of assessed value of improved and unimproved land, personal property, and footage on or abutting boulevards, parkways, and trafficways

Economic Information: Greater Kansas City Chamber of Commerce, 2600 Commerce Tower, 911 Main St., Kansas City, MO 64105-2049; telephone (816)221-2424; fax (816)221-7440; email info@kcchamber.com. Kansas City Area Development Council, 2600 Commerce Tower, 911 Main St., Kansas City, MO 64105-2049; telephone (816)221-2121; toll-free (888)99KCADC; fax (816)842-2865; email kcadc@thinkKC.com. State of Missouri, Department of Economic Development, 301 W. High St., PO Box 157, Jefferson City, MO 65102; telephone (573)751-4962; fax (573)526-7700; email ecodev@ded.mo.gov