Economy Remains Contradictory, Experts Say
by January 16, 2014 2:44 pm 92 views
Economists presented a medley of strong and weak indicators for the Arkansas, U.S. and world economy during the 20th annual Business Forecast luncheon Thursday in Rogers.
“In Arkansas, we’re going to slog along in this long, boring, not quite good enough recovery,” said Kathy Deck, director of the Center for Business and Economic Research, which coordinates the event. The CBER is part of the University of Arkansas’ Sam M. Walton College of Business.
“I’m a little worried about Arkansas’ rural areas … sluggish growth in manufacturing employment is holding back our overall success as a state,” said Deck. “I’m using a new term: unwanted leisure. We will continue to be beset by unwanted leisure, and our biggest challenge is how to deal with that. There’s not enough momentum in enough sectors to get us back to pre-recession levels in the next couple of years.”
Arkansas workers continue to earn less than those in the rest of the nation, and the state’s labor force continues to shrink, but several regions of the state are showing promise, she said.
The Fort Smith region has seen its first growth since the Whirlpool plant closing in June 2012. The Little Rock metropolitan area has regained its pre-recession employment rates. And Northwest Arkansas in particular is enjoying broad employment growth in all sectors, Deck said.
The same factors that spurred growth in 2013 will do so again in 2014, Deck said — construction of new housing, commercial buildings and highways; leisure and hospitality, with new restaurants and hotels and expansion of dynamic projects such as the Crystal Bridges Museum of American Art; retail growth, particularly from local entrepreneurships; and professional and business services, which consists of high wage, high skill jobs.
Per capita personal income in Arkansas lagged behind the U.S. average in 2012, which is the most recent data available, Deck said.
“We’d like to be as prosperous as the rest of the nation. But we are at 81.3 percent of the U.S. average in Arkansas, and at 84.3 percent in Northwest Arkansas,” she said.
More than 1,000 attended the luncheon at the John Q. Hammons Center in Rogers. Moderator Donnie Smith, chief executive officer and president of Tyson Foods Inc. told the crowd that his company expects the demand for chicken products to remain strong, although consumers are demanding more value from their food than ever.
“No one thinks consumers are going back to the pre-2008 mindset,” he said.
Richard Yamarone, chief economist for Bloomberg Brief, warned that the U.S. economy remains on thin ice and prone toward recession.
“The U.S. is not getting the boost in job creation that’s needed,” he said. “What matters is the types of jobs — can they support families and get the economy going? We aren’t gaining those types of jobs.”
Yi Wen, assistant vice president of the research department for the Federal Reserve Bank of St. Louis, said he firmly believes the U.S. economy remains best in the world.
“China looks to have a star economy, based on its portrayal in the western media,” Wen said. “But if you live in China long enough, you’ll get a very different picture, one marred by a housing bubble, massive scale government corruption, and an alarming array of environmental problems.”