Citing an improved labor market and sales tax collections, the city of Fort Smith was the top performing of 16 Arkansas cities measured by an economic index created by Arkansas Tech University. The data presented in the index may be “counter intuitive” when compared against other data that shows weakness in labor markets and sales tax collections, said an index author.
The Arkansas Tech Business Index (ATBI) uses a labor index, housing market index, construction index and retail sales index to compare 16 Arkansas cities. The March 2014 index gave Fort Smith an index rating of 106.32 for the first quarter of 2014, the highest rating among the 16 cities measured on the index.
The index is based around 100. A city reading above 100 indicates that the city is doing better than the state average from 2009 to the present. In the March report, seven have an index rating above 100 and nine have an index rating above 100 for the first quarter of 2014.
“Fort Smith came on strong in the first quarter ATBI,” Dr. Marc Fusaro, associate professor of economics at Arkansas Tech and developer of the instrument for the Arkansas Tech Business Index, said in the statement. “This strength is led by the retail sector, which is always strong for Fort Smith, having an ATBI retail sales index value of 116.7 in the first quarter. Helping to drive the strong showing is a drop in the unemployment rate to 6.5 percent in March from an average of 7.5 percent in 2013.”
Following is the March index for the 16 cities.
El Dorado: 93.31
Fort Smith: 108.36
Hot Springs: 100.85
Little Rock: 98.53
North Little Rock: 95.27
Pine Bluff: 91.58
West Memphis: 93.06
Fort Smith Mayor Sandy Sanders said the March index from ATU reflects the city’s ability to adjust to economic change.
“The data from Arkansas Tech University is a testament to the perseverance of our citizens, and the ability of our businesses and entrepreneurs to adjust in a rapidly-changing economic environment. Almost every day we spend time on jobs and economic growth,” Sanders said in a statement. “Our corporate citizens continue to innovate, as does our military. Emerging technologies are a focus in nearly every sector, bringing with it specialized jobs and higher wages. … In the past 18 months, we’ve seen announcements from new and expanding organizations in our region – worth $400 million and commitments for 2,300 new jobs.”
While the ATU report gave the city a high index number for retail sales, Fort Smith sales tax collections have not shown growth in recent years. Collections so far in the first quarter of 2014 were $11.688 million, while the same period in 2013 saw collections of $11.702 million. The same period in 2012 saw $13.586 million, and $12.932 million in 2011.
The labor market index of 103.05 for March 2014 comes with the number of employed in the Fort Smith region being 119,603. By way of comparison, the region the city had an index of 91.82 in March 2009 when the number of employed in the region was 123,574, almost 4,000 more employed, or 3.21% better than March 2014. Also, the monthly employment average in first quarter of 2014 was 118,807, just 0.14% above the average during the first quarter of 2013, and 1.96% below the first quarter of 2012.
In March 2014, the Fort Smith metro workforce totaled an estimated 128,695, down more than 4.3% – or 5,847 – compared to 134,542 in March 2009.
When asked about the index comparison to regional jobs figures and sales tax collections, Fusaro said the index is relative and simply compares Fort Smith to the other 16 cities.
“For example, from March 2009 to March 2013 the Fort Smith labor force fell from 42255 to 39551. The ATBI labor force index rose from 99.85 to 102.79 in the same period. This seems counter intuitive. The reason for this is that the labor force for the state fell at an even faster rate during this time period. So Fort Smith has done relatively well compared to the rest of the state,” Fusaro noted in an e-mail response. “The best way to evaluate the labor market performance in absolute terms is to just look at the size of the labor force. The ATBI is not designed to replace looking at raw data. It rather, provides different information, the relative performance across the state.”