A quick study of the potential long-term economic impact of the planned $1.1 billion steel mill in northeast Arkansas suggests that the operation could eventually boost Arkansas’ GDP by $236 million a year.
Arkansas landed its first official “superproject” as Big River Steel announced plans on Tuesday (Jan. 29) to construct a $1.1 billion-plus steel mill in Mississippi County near Osceola. The mill will employ 525 workers initially with average annual wages of $75,000 – more than double the state’s per capita income.
Also, the mill is expected to provide 2,000 construction jobs and could lead to the location of supplier businesses and steel customers locating in the region.
The economic impact study, performed for The City Wire by University of Arkansas at Little Rock researcher Gregory Hamilton, does not include indirect benefits of supplier businesses that might locate. Hamilton’s study, which was performed using a software program to quickly calculate economic impact of jobs gained or jobs lost.
Hamilton’s report used the following assumptions:
- $1.1 billion dollar construction project in northeast Arkansas over a 20-month period starting 2014. Expenditures in 2014 are estimated at $660 million and $440 million in 2015.
- Jobs created are estimated at 525 with an average salary of $75,000. Operations start in 2015 at plant.
- Period of analysis is 2014-2040.
The impacts on the state from the $1.1 billion steel mill project, based on Hamilton’s analysis, between 2016 and 2040 include:
- After construction, there will be 1,717 more jobs on average per year in the state;
- GDP in the state will be $236 million higher than it would have been on average per year;
- Earnings by place of work will be $196 million higher than it would have been on average per year;
- Household disposable income will be $221 million higher than it would have been on average per year; and,
- Population will be 3,375 higher than it would have been on average per year.