Randy Zook, CEO of the Arkansas State Chamber of Commerce, appeared on this week's edition of Talk Business on Fox 16 to discuss the overall state economy, the Fayetteville Shale play, and a manufacturing decline hitting Arkansas.
Zook said that despite improvement in the numbers, such as increased tax collections and consumer spending, it still doesn't feel like a strong recovery in part due to a slow jobs rebound and lost home values.
“Overall economic activity is indeed improving and we're clawing our way back ever so slowly,” Zook said.
The Fayetteville Shale play made headlines this week when a report, underwritten in part by the state chamber, showed major positive ramifications for the Arkansas economy. The study conducted by the University of Arkansas noted that natural gas company investments in Arkansas were 29% higher than expected from 2008-2011 – $12.7 billion and 22,000 new jobs.
“We're thrilled with the finding because it's even stronger than was predicted back in 2008 by the same organization,” Zook said. “These numbers are just proof-positive that the Fayetteville Shale play has been the thing that has kept us from looking like the rest of the country over the last 3, 4, 5 years.”
While drilling has fallen by as much as two-thirds in the past few years in lockstep with declining natural gas prices, Zook sees a rebound in the works for gas prices that should benefit Arkansas and the U.S. economy.
“The low price will pull demand,” he said, adding that natural gas exports have the potential to significantly alter global energy markets.
While there are bright spots in the economy, Zook expressed concern that manufacturing in Arkansas is not rebounding like it has in other southern states.
Federal and state data indicates that manufacturing employment in the South is benefiting from a return of jobs from China. However, Arkansas' manufacturing sector seems to be missing this revival.
“It hasn't happened yet in Arkansas,” Zook said, noting that other states had more money to incentivize investments and have scored early successes that Arkansas hasn't. Still Zook is optimistic that economic development officials will see benefits from their current recruiting efforts.
“We'll get our share and it will come,” he said.
You can watch Zook's full interview in this video.