Compass Report: Rapid Pace Of Growth Continues For NWA Economy

Continued gains in employment and sales tax collections helped the Northwest Arkansas economy finish 2013 with a strong fourth quarter, according to The Compass Report.

The fourth quarter 2013 grade of B+ was unchanged compared to the third quarter and was an improvement over the fourth quarter of 2012.

The quarterly Compass Report for Northwest Arkansas is managed by The City Wire. The report is the only independent analysis of economic conditions in the metro area.

Economist Jeff Collins, who conducts the data collection and analysis for The Compass Report, said the regional economy “continues to grow at a rapid pace,” and he sees no reason it will slow in the near term.

“Despite (Northwest Arkansas) being roughly two-thirds the size of the Central Arkansas economy, nonfarm employment grew at at four times the rate of the state’s largest MSA,” Collins noted.

Continuing, he wrote: “The unemployment rate in Northwest Arkansas was the lowest in the state amongst all MSAs in December (4.9%). It was more than a full percentage point lower than that for the Little Rock/North Little Rock/Conway MSA (6.2%). The highest rate in the state was the Pine Bluff MSA at 9.8%. To add perspective, of the 372 MSAs in the country, only 22 posted rates above 10% in December and only 78 had rates below 5%.”

METRO COMPARISONS, IMPACT
The 2013 fourth quarter economy in the central Arkansas area received a grade of C- meaning that economic conditions declined slightly compared to the fourth quarter of 2012, and were unchanged compared to the third quarter of 2013.

The Compass Report for the fourth quarter of 2013 shows that small but broad based gains in key metrics has resulted in the Fort Smith regional economy finishing out 2013 with two consecutive positive quarters.  A fourth quarter 2013 grade of C+ was unchanged compared to the third quarter and better than the C grade in the fourth quarter of 2012.

Collins said the relative poor performance of the central Arkansas economy is not a positive indicator of the overall Arkansas economy.

“The Central Arkansas regional economy is the most diverse in the state and arguably the representative of overall statewide economic performance. Given this relationship, recent data indicates the statewide economic outlook remains subdued,” Collins said.

He also said the three metro areas – especially Northwest Arkansas – continue to be key job generators for the state.

“To underscore the impact of the three largest metro areas, for December of this year the unemployment rate for the rest of the state was 8.5%, up 0.3% from December 2012 to December 2013. The statewide unemployment rate with the three largest metros added back in was 7.2%, up 0.1% December-on-December,” Collins said.