Arkansas, U.S. economic reports show positive signs

Arkansas’ economy saw “weak” signs of improvement and there were better signs of growth from a closely watched national manufacturing report.

Overall, both reports provide reasons for economic hope for a Fort Smith region still dominated by durable goods manufacturing.

Arkansas’ Business Conditions Index for October rose to 42.6 from a 41.2 in September. (Any number above 50 indicates future economic growth.) The index is based on a survey of supply managers and is conducted by Omaha, Neb.-based Creighton University’s Economic Forecasting Group.

The group’s Arkansas report said the October improvement was weak, and noted that Arkansas has lost 3.1% of its jobs since the recession began in December 2007, with 2.9% of the loss occurring since October of 2008.

“Even though Arkansas’ unemployment rate has stabilized, based on our surveys over the past several months, I expect the state’s jobless rate to increase by another 0.2 percent by the end of the year,” Ernie Goss, director of the forecasting group, said in a statement about the Arkansas economy.

Nationwide, the manufacturing sector is on a three-month growth spurt, according to the Institute for Supply Management and its Manufacturing Business Survey Committee. The report is derived from information collected from purchasing and supply executives nationwide.

“The manufacturing sector grew for the third consecutive month in October, and the rate of growth is the highest since April 2006 when the PMI registered 56%,” noted Norbert Ore, chair of the ISM.

Ore said production and employment gains boosted the index.

“Production appears to be benefiting from the continuing strength in new orders, while the improvement in employment is due to some callbacks and opportunities for temporary workers. Overall, it appears that inventories are balanced and that manufacturing is in a sustainable recovery mode,” Ore noted.

The ISM noted that 13 of the nation’s 18 major industry sectors reported growth in October, including appliances and components — think Whirlpool, Rheem and Trane.

Recent improvements in orders, as noted by the ISM index, could be the reason for callbacks of as many as 350 workers to manufacturing plants in Fort Smith. Whirlpool Corp. confirmed Oct. 16 a recall of up to 150 Fort Smith employees, and on Oct. 30, Rheem confirmed a potential recall of 208 workers to its Fort Smith operation.

The positive ISM report wasn’t the only positive economic report issued Monday.

The U.S. Department of Commerce said new home construction helped boost overall construction spending in September. Economy watchers said the rise could mean the national housing sector has hit a bottom and may see a slow recovery.

Also, the National Association of Realtors said September contracts on previously owned homes increased for the eighth consecutive month.