There was nearly as much good news as bad news in 2011. For every job announcement, there seemed to be a layoff announcement. For any improvement in a key part of the economy, it felt like a counterbalancing negative setback materialized. It had many business observers chalking 2011 up to “the forgotten” column.
THE ECONOMY SPUTTERS
Despite improving numbers in parts of the economy, there was close to an equal amount of negative trends. While corporate profits and bank profits rose, unemployment remained relatively high and the prospects for job gains in 2011 are likely to be erased when final data is tabulated.
Sales tax collections struggled at the state and local levels, but income tax collections showed strength, a sign of worker and wage health. Home sales started off slow, but made gains. A likely scenario suggests that residential sales will end the year fairly flat.
All in all, a look at key statistics suggest two steps forward, one-and-a-half steps backwards. As UALR economist Michael Pakko described it, 2011 will be considered by many to be “the lost year.”
PUBLIC FIRMS FIND THEIR FOOTING
Arkansas’ high-profile, publicly-traded companies had an exceptional 2011 in many regards. Trucking giant Arkansas Best Corp. returned to the black; Windstream Corp. completed several transformational acquisitions; Many public banks, like Home Bancshares and Bank of the Ozarks, completed out-of-state expansions.
In the retail sector, Dillard’s continued its hot streak of profitability and Walmart saw improvement in same-store U.S. sales for the first time in more than two years. Tyson Foods had a solid year of profitability despite volatility in its chicken segment.
At one point mid-year, the 15 largest publicly-traded firms headquartered in Arkansas all recorded positive net income for the reporting quarter — a feat that hadn’t happened since before the 2008 recession.
WHIRLPOOL FACTORY TO CLOSE
It came as no real surprise that after months of speculation Whirlpool announced it would shutter its Fort Smith factory in 2012. The move will result in layoffs of nearly 1,000 workers and close to another 500 indirect jobs from suppliers and vendors in the community.
At one time, the Whirlpool plant employed more than 4,600 workers. It also appears that another high-profile project, the Mitsubishi wind turbine factory in Fort Smith, could also be delayed in its opening.
YARNELL’S ICE CREAM SHUTS DOWN
An iconic Arkansas brand name, Yarnell’s Ice Cream, a fourth-generation family business based in Searcy, unexpectedly closed its doors in late June. Nearly 200 workers lost their jobs.
The privately-held ice cream manufacturer initially said it would cease production indefinitely, but several weeks later it filed for Chapter 7 bankruptcy citing $15.7 million in liabilities and $8 million in assets.
There’s hope that the plant may re-open soon thanks to new buyers, but the economic challenges that led to Yarnell’s closure still remain.
FARMERS BATTLE FLOODS, DROUGHT
Farmers in Arkansas are used to turbulent times, but weather conditions throughout 2011 certainly taxed their patience and their skills.
In the spring of 2011, flooding from heavy rains submerged more than one million acres of farmland. By some estimates, more than $500 million in crop damage was tabulated, but that didn’t account for additional damage for infrastructure repairs, totaled farm equipment, and loss of grain in storage bins. Nor did that estimate include lost income and wages for farm workers.
When the waters receded, along came devastating summer heat that baked already crippled farming operations. The pounding was so bad that Gov. Mike Beebe asked for — and received — a federal natural disaster designation that covered all 75 counties in state.
CRYSTAL BRIDGES OPENS
One of the highlights of the year from a cultural and business perspective centered on the November opening of the Crystal Bridges Museum of American Art in Bentonville.
The $1.4 billion museum was funded by Walmart heiress and philanthropist Alice Walton. The 200,000 sq. ft. campus has 12 art galleries housing more than 450 pieces of original American artwork spanning 5 centuries.
Tourism officials, thrilled to have a new attraction to lure visitors to Arkansas, expect as many 250,000 people to travel to the region annually.