NWA Economic Report Highlights Need For Improvement

Employment growth in Northwest Arkansas is back to pre-recession levels but the region continues to lag behind comparable communities in education attainment, according to the 2012 State of the Northwest Arkansas Region Report.

“Northwest Arkansas blows away even the best competitors in job growth,” said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas.

When compared to its competitor regions, Northwest Arkansas had the second lowest unemployment rate in 2011. The unemployment rate dropped 0.3% from 2010 to 6.2% in 2011.

Deck, along with Mike Harvey, the Northwest Arkansas Council’s chief operating officer, presented the report in a press conference Thursday (Sept. 27). This is the second year for the report, which compares economic measures in the NWA region, including Benton, Madison and Washington counties in Arkansas, and Missouri’s McDonald County.

The region was compared to similar areas around Huntsville, Ala.; Kansas City; Knoxville, Tenn.; Omaha, Neb.; and Tulsa, Okla. It also compares conditions with Arkansas and the United States. Some of the comparison regions were chosen based on similar demographic information. Others, like Kansas City, were chosen because many people compare NWA to that area.

“Today’s companies look at hundreds of criteria when they size up whether they want to expand in a particular region,” Harvey said. “Regions must be strong in dozens and dozens of areas to show companies that they can meet their needs.”

Northwest Arkansas was affected by the major recession, but not as badly as other regions. The region’s recovery has also been stronger, according to figures in the report.

“We were insulated but not immune,” Harvey said.

THE GOOD NEWS
Between June 2011 and June 2012, the region added about 7,200 jobs, according to the report.

NWA’s employment declined only 2.3% since the beginning of 2008, which is a smaller percentage than any other comparable region except for Huntsville. In all, employment in NWA grew at 25% from 2000 to 2011.

The hiring is happening across the board with no specific sector having extraordinarily larger gains than others, Deck confirmed. The areas that saw the most growth included professional and business services, education and health services, and the leisure and hospitality industries.

The only noticeably declining sectors were manufacturing and the information sector in the last decade. Manufacturing remained unchanged in the last year and the information sector gained 100 jobs in the same timeframe, from June 2011 to June 2012.

While the recession caused a slight decrease in growth of business, overall there was a 34.8% increase in the number of business establishments from 2001 to 2011, according to the report.

The smaller businesses are where the bulk of the job growth happens. Large national companies coming in to hire a couple hundred people gets attention, but the smaller number of jobs adds up, the experts said.

“The local employers are what are expanding,” said Rob Smith, communications and policy specialist with the NWA Council. “Eighty to 90% is small growth.”

ROOM FOR IMPROVEMENT
Some of the business growth could be attributed to research and development happening at the University of Arkansas which is an area where the region remains strong but has room to grow.

Research expenditures increased by 34.7% from 2001 to 2009, but the growth rate was the second slowest among other major research institutions in similar areas.

“We’re on the right side but we want to expand,” Deck said.

Research and development creates spin-off dollars that are directly relevant to economic success,” she added.

The research generates knowledge, which can be used to grow business and generally adds value to everyday life.

Education attainment is the major area that experts would like to see improvement, according to the report. While the region ranks better than the state as a whole, it still lags behind comparable regions in the percent of adults who have at least a bachelor’s degree. There are just more than 25% of the adults in NWA who have that level of education.

Harvey said there are multiple initiatives working towards improving the education attainment levels in the region including:

• Reach Out NWA — a program with local high schools designed to reach out to high school students who have already dropped out to help them overcome barriers to returning to the classroom;
• Razor Coaches — a program that helps students who are still in school, but who are at risk for dropping out to figure out what they want to do as a career and what educational goals they must set to achieve those jobs;
• Graduate NWA — a program for nontraditional students who have some college education and want to return to the classroom to complete their degree; and
• Business Retention Expansion –a structured outreach program that works with local chambers to help businesses expand by determining what their needs are in regards to trained personnel. By knowing what businesses need, students can then be guided towards possibly pursuing those types of careers.

Other key findings in the report show the region as a safe and prosperous place to live.

In 2009, Northwest Arkansas had the lowest crime rate compared to the sister regions when looking at crime incidents reported per 100,000 people.

The region’s real gross domestic product (GDP)  also grew a healthy 37.5% from 2001 to 2010.