Leading Industries

Thanks in large part to its central location and open access to interstate and rail shipping, the business make-up of Metropolitan Kansas City is shaped by the predominant area of trade, transportation and utilities, according to the Bureau of Labor Statistics' definition of economic super sectors.

But that sector,while dominant, is far from defining. Nearly tied for the second and third spots are government jobs, along with professional and business services. Close behind are education and health services, leisure and hospitality and even manufacturing, which remains strong in this area.

What does that broad mix do for Kansas City’s regional economy? It provides a remarkable endurance in the face of national economic swings. As studies by the Federal Reserve Bank of Kansas City have noted, the Fed’s 10th District has a nearly unmatched record of being last among Fed regions to be drawn into national recessions, as well as first to emerge from them.

It gives Kansas City a quality highly prized by company officials seeking to relocate: Fundamental stability.

Communities in this region tend to boast a healthy business mix. Education and health care, goods and services that target larger markets, trade and transportation—because they rarely suffer major declines at the same time, they act as an economic safety net for the region when compared to cities of similar size across the United States.

There’s no getting around the impact of a state line nearly bisecting a broader community of more than 2 million people: No other major city in the country is as evenly split that way, a condition that can impede regional progress, but one that also adds an element of competition missing in the business dynamics of other cities.

Kansas, for example, has used the power of public financing to pursue a growing life sciences sector and bringing those higher-wage jobs into that side of the metropolitan area. The Missouri portion of the MSA, by contrast, holds a 12-percentage-point advantage in manufacturing, accounting for 56 percent of the Kansas City work force in that sector.

Historic Roots

Kansas City has long been a leading center of transportation, distribution, manufacturing, animal health, and the financial industry. The area’s utility and telecommunications infrastructure, behind the gravity of a Fortune 100 company in Sprint Nextel, has enabled the region to develop a number of successful telecommunications, data center and contact center operations, as well as information-technology heavyweights such as Cerner Corp. and DST Systems. Sprint, like another Fortune 500 company based here, YRC Worldwide, has seen its work force contract in recent years, but it remains the largest non-retail employer in the Kansas City region, and YRC is still among the Top 25.

The trade, transportation, and utilities category has historically been the region’s largest employer, reflecting the area’s location and position relative to natural resources. Government employment is the second major area, followed by professional and business services, then educational and health services.

Major manufacturing employers include Hallmark Cards, which was founded in Kansas City in 1910, as well as American Italian Pasta, the largest producer of pasta in North America, as well as assembly plants for both General Motors (in the Fairfax Industrial District on the Kansas side) and Ford Motor Co. (with its Claycomo plant in Missouri).

Government workers are a major force here. Including military bases such as Whiteman Air Force Base near Sedalia, Mo., and Fort Leavenworth, the federal government employs nearly 40,000 area workers. Other large employers in the region include the University of Kansas and the many school districts in Kansas City and Kansas City, Kan., as well as surrounding suburbs.

And, testament to the region’s claim to being a regional center for health-care services, three of the 10 largest employers are hospitals: Saint Luke’s Health System, Children’s Mercy Hospitals and Clinics, and the University of Kansas Hospital, a public health authority.

A number of companies have recently relocated significant operations or expanded existing operations in the Kansas City metropolitan area. These include Federal Express, Wausau Supply, Procter & Gamble, and H&R Block.

Making possible the location of many of those organizations is the region’s nearly unmatched set of transportation assets. The region ranks as the third-largest truck terminal and the second-largest rail center in the United States, and is adding to that base with additional air-cargo capacity (more flights out of Kansas City International Airport are laden with cargo than passengers) and intermodal operations on enormous scale.

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.

Even many of the region’s new and upcoming industries share a historic base. Animal and human life sciences are both built on the region’s long-standing strengths in agriculture, health care and higher education economies. Combined with long-time local organizations such as MRI Global, formerly known as the Midwest Research Institute, and corporations such as Bayer Animal Health, these industries are evolving into growing markets for the 21st century.