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FORECAST ISSUED | Slowing growth ahead KC leaders are pegging their economic hopes on attracting more animal-health firms. The Kansas City Star Joerg Ohle is chairman of the advisory board of the so-called Kansas City animal-health corridor, where more than 100 animal-health companies do business. Confronted by a relatively sluggish regional economy, Kansas City leaders are looking to the animal-health industry for a boost. While the national economy has been expanding fairly vigorously –— 3.5 percent between the second quarters of 2005 and 2006 — the area economy posted only 3 percent growth over the period, Frank Lenk, an economist with the Mid-America Regional Council, said Friday at the Greater Kansas City Chamber of Commerce’s Economic Forecast Breakfast. The region’s economy is expected to sputter in the coming year, Lenk said, with growth slowing to 2.2 percent. “We are a little bit slower overall than the U.S.,” Lenk said. The struggling telecommunications industry continues to weigh on the regional economy, Lenk said, and a slowing construction sector also will take a toll. The region added about 17,100 jobs through the yearlong period ending in the second quarter, according to the economic forecast. The next year is expected to bring only 11,000 more. “The economy will avoid an outright recession,” Lenk said, “though 2 percent to 2.5 percent growth won’t feel very good.” Lenk said he does see signs that the economy will start to rebound in 2008. Gross regional product growth should reach 2.6 percent. One growth strategy receiving attention is an initiative to expand the cluster of pharmaceutical makers, service businesses and others in the $14.2 billion regional animal-health industry. Kansas City-area companies, including Bayer Animal Health, Boehringer Ingelheim Vetmedica Inc. and Intervet, account for 30 percent of the regional market in the so-called Kansas City animal-health corridor — with $4.3 billion in annual sales. This animal-health initiative has great potential to make an economic contribution, considering that the popularity of dogs and cats is increasing, said Joerg Ohle, Bayer Animal Health’s president and chairman of the corridor initiative’s advisory board. “We are spending more money than ever on our pets,” Ohle said. “That means growth for Kansas City.” Nestlé Purina PetCare Co. , for example, is spending $36 million on an expansion of its Kansas City-area facility. Bayer is recruiting to fill 50 new sales, marketing and technical jobs, which would boost its total area employment to about 570. While some area business leaders and those in the industry were aware of the region’s strength in animal health, the study indicating that the corridor is home to more than 100 companies caught others by surprise. “We have the largest concentration of the animal-health industry in our region,” Lynn Parman, vice president for life sciences and technology for the Kansas City Area Development Council. “Who knew?” The Kansas City area’s efforts to expand this group of companies already have seen success. The more than 60 businesses in the region that sell supplies or services to more than 100 area animal-health companies show how the industry also has had a ripple effect beyond its direct investment and employment, Parman said. “They are here because the companies are here,” Parman said.
Reproduced with permission of The Kansas City Star © Copyright 2006 The Kansas City Star. All rights reserved. Format differs from original publication. Not an endorsement. |
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