Outlining educational progress and the ways in which inflation continues to impact Kentucky's economy, the Center for Business and Economic Research (CBER) — the applied economic research branch of the Gatton College of Business and Economics at the University of Kentucky — released its 51st Kentucky Annual Economic Report today.
One of the key findings reveals, after years of increasing educational progress, Kentucky is losing ground to other states. "While the pandemic has likely contributed to our stalled K-12 progress, this trend appears to pre-date COVID," Michael Clark, director of CBER, said. "There are many factors affecting economic success, including a culture of innovation and entrepreneurism, widespread internet access, favorable tax policies and infrastructure development — but education is the most important factor for the state's future economic prosperity."
The report is one of the many ways CBER fulfills its mandated mission as specified in the Kentucky Revised Statutes to examine various aspects of the Kentucky economy. CBER performs research projects for federal, state and local government agencies, as well as for private sector and nonprofit clients nationwide.
The report covers a variety of issues ranging from an economic forecast for the Commonwealth in 2023 to a comprehensive presentation of agricultural, community, economic, economic security, education, energy, environment, health, infrastructure, innovation, population and public finance factors affecting Kentucky's future economic prosperity.
Additionally, the report highlights more than 100 trends, forces and factors affecting Kentucky's economy. "Many people, from business leaders to politicians to citizens, will find relevant information in the annual report," Clark said.
The rise of inflation and the possibility of a recession is also touched upon in the detailed report.
"The path of inflation and the possibility of a recession represent immediate and serious challenges for the economy," Clark explained. "However, systemic issues, such as workforce development, labor force participation, health security, and racial, gender, and ethnic disparities represent long-term economic challenges."
According to the report, most economic sectors have recovered from the pandemic downturn. By mid-2022, Kentucky's private employment totals equaled their pre-pandemic levels.
However, many workers who left their jobs during the pandemic — particularly parents of young children and those close to retirement — have not returned to the workforce. For example, Kentucky's employment-population ratio declined from 56.2% to 55.4% from February 2020 to November 2022.
"This is troubling, because Kentucky already had one of the lowest labor force participation rates among prime working age adults in the country," Clark said.
Additionally, the report provides regional comparisons across the Commonwealth. These comparisons show that some areas have suffered disproportionate economic hardships — before, during and after the pandemic's peak.
"One of the priorities of the Gatton College is to help promote economic growth throughout the state of Kentucky," Dean Simon Sheather added. "Our goal with the economic report is to help inform Kentucky business leaders, politicians and citizens with relevant information that assists in the decision-making process that can aim to improve Kentucky's future economic prosperity."
Digital copies of the 2023 Kentucky Annual Economic Report can be obtained online
