Review of business news from the region, state and world

by The City Wire staff ([email protected]) 70 views 

A few business notes from around the region, state and world.

Good Job News
Van Buren-based Consolidated Printing is in the midst of a $1.5 million expansion that should increase employment there from 150 to 200 before the end of January, according to this report from KHBS/KHOG 40/29 TV.

The Consolidated expansion is welcome news in a region afflicted with at least 1,300 job cuts and layoff announcements in the past few months.

Natural Gas Market Moves
With the Fort Smith region active with natural gas exploration and production companies, the monthly activity report from the American Gas Association is always of interest.

Highlights of the report are:

• Domestic natural gas production has dipped slightly in recent weeks, dropping about one percent (compared to November 2008) to 54.9 Bcf per day. Even with the slight decrease, December production has been about four percent higher than in December 2007 and overall production in 2008 is about 5 percent higher than in 2007 (even with the impacts of an active 2008 hurricane season).

• National rig counts have fallen 11 of the past 16 weeks going from 2,031 rigs operating to 1,721 as of December 26, 2008. Many analysts believe they will fall even more as producing companies continue to announce program reductions for 2009. Total rigs are now behind the count from one year ago by four percent and gas-directed drilling at 1,347 rigs is eight percent less than one year ago. Having said that, 79 percent of the rigs operating in the U.S. are still drilling for natural gas.

Top Nursing Center
The Charleston Express reports that the Greenhurst Nursing Center in Charleston was the only area nursing home to receive the top rating of five stars. The five star rating puts Greenhurst in the top 12 percent of nursing homes in the United States. Of the nearly 16,000 Medicare and/or Medicaid certified nursing homes in the country, 1893 received the five-star rating. The rating was given by the Center for Medicare Services.

Kriss Schaffer, administrator of Greenhurst, credited his staff with the rating Greenhurst achieved.

Each facility is rated from a low of one star to a high of five stars based on three critical areas: health inspection results, quality measures, and nursing home staffing levels.

Trucking Money Moves
Johnelle Hunt, a co-founder of Lowell-based J.B. Hunt Transport Services and widow of J.B. Hunt, recently sold more than $7.12 million of her Hunt stock, according to this report from The Morning News.

According to the report, Johnelle Hunt has sold $54 million, or about 7 percent of her holdings, in Hunt stock during December. After the sale of stock, Johnelle Hunt is estimated to control almost 25 percent of the company’s outstanding stock.

National Job Woes Continue
Initial jobless claims dropped by 94,000 to 492,000 in the week that ended Dec. 27, the lowest level in almost two months, the Labor Department said today in Washington. The number of people collecting benefits jumped in the prior week to the highest level since 1982, according to this Bloomberg report.

Analysts attribute the decline to the holiday job market and expect the jobless rate to increase in early 2009.

The number of people staying on employment benefit rolls surged to 4.506 million, the highest level since December 1982, in the week ended Dec. 20 from 4.37 million.

So far this year, job losses have totaled 1.9 million and economists surveyed by Bloomberg forecast payroll cuts of 475,000 in December. Jobs losses are likely to continue into next year, as economists surveyed by Bloomberg this month forecast the jobless rate to rise to 8.2 percent by the end of 2009 from 6.7 percent last month.

Energy Prices Remain Low
Oil slid below $37 a barrel on Wednesday in London markets, heading for a fall of more than 60 percent in 2008. Crude oil hit an all-time high of more than $147 in July but prices have collapsed in the last six months as the credit crisis has pushed the industrialized world into recession, according to this report from Reuters News.

Analysts forecast an average of $49 a barrel for U.S. crude in the first quarter, and an average of $58.48 for next year, down $14 from their previous forecasts.

2008: Year of Misery
Bloomberg News notes in this report that 2008 was a “year of record misery.” They note the year brought us the largest bankruptcy, bank failure and Ponzi scheme in U.S. history; $720 billion in writedowns and losses by financial institutions; $30.1 trillion in market valuation wiped out.

Key points made in the report include:

• Global stock markets lost about half of their value in 2008, or $30.1 trillion dollars. In the U.S., $7.2 trillion of shareholder value was wiped off the books, as the Standard & Poor’s 500 Index fell 39 percent through Dec. 30 and the Nasdaq Composite Index dropped 42 percent.

• There were 25 bank failures in 2008, the most in 15 years, according to the Federal Deposit Insurance Corp. The combined assets of lenders that failed in 2008 exceeds the total of those that collapsed in the preceding six years.

• The wave of writedowns and losses that swamped financial institutions around the world reached $720 billion this year. It also eroded employment: 221,360 job cuts in the financial-services industry were announced.

• Overall, the federal government has committed $8.5 trillion in trying to jumpstart a shrinking economy. General Motors Corp. and Chrysler LLC will get $13.4 billion in federal loans to stay afloat until President-elect Barack Obama’s administration can devise a rescue plan of its own.

• Investors pulled $215.7 billion from stock mutual funds in the first 11 months of the year, according to Investment Company Institute, a Washington-based association. That compares with a $91 billion inflow of funds for the same period of 2007. As a result of those withdrawals and market losses, the total net assets in all types of mutual funds fell by $2.67 trillion in the first 11 months of 2008, the institute reported.