LEAWOOD, Kan., Nov. 13, 2012 /PRNewswire/ -- The Kansas economy is expanding at a modest pace despite the agriculture sector reeling from the impact of this year's extreme drought. Real GDP should expand 1.5 percent this year, before it picks up to a 2 percent pace in 2013, when crop conditions are presumed to be more favorable and income and sales tax reductions boost disposable incomes, according to the State Monitor report by BMO Capital Markets Economics.
The bill passed by Kansas lawmakers that will lower state income tax rates in 2013, along with an expiring sales tax increase (back to 5.7 percent from 6.3 percent) scheduled in July, should provide a total tax relief of $231 million in the fiscal year beginning July 1st.
The impact on the housing bubble-bust didn't really impact Kansas, with prices just 3 percent below peak levels in 2012 Q2, according to the FHFA price index. At less than 8 percent, the share of mortgages in a negative equity position is among the lowest in America, in part due to a low foreclosure rate – 2.3 percent, having a small impact on prices.
"We've seen a significant increase in customers looking to refinance their current residence or finance a new home," said BMO Harris Bank Kansas City President, Brad Smith. "We have expanded our team of mortgage specialists knowing that the housing market was positioned to improve and to further expand our presence in the market."
Kansas employment is expanding at a decent clip, up 1.1 percent year over year in August, and the jobless rate of 5.9 percent continues to clock in well below the national average. Professional services, up 4.4 percent year over year, and manufacturing, up 2.7 percent year over year, are among the leaders in state job growth. Construction employment continues to cycle low, but hasn't seen the severe peak-to-trough decline experienced in other markets. Government payroll declines appear to have stabilized, but spending remains tight alongside income tax reductions.
The full State Monitor report can be downloaded at www.bmocm.com/economics .
About BMO Harris Bank
Based in Chicago, BMO Harris Bank N.A. provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with 1,600 branches, and a retail deposit base of approximately $180 billion.
SOURCE BMO Financial Group