Made In America: Fed’s Beige Book Show Mixed Results For 8th District Economy

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FED’S BEIGE BOOK SHOWS MIXED RESULTS FOR 8TH DISTRICT ECONOMY
The most recent federal Beige Book report for St. Louis’ Eighth District, which includes Arkansas and portions of Illinois, Indiana, Kentucky, Mississippi, the eastern half of Missouri and West Tennessee, offered a mixed assessment of economic activity across the highly-diversified region.

The monthly report provides anecdotal information of key economic activity in different sectors of the sprawling district that is led by St. Louis Fed chief James Bullard.

Some of the best news for Arkansas came from the real estate and construction sectors where the St. Louis Fed reported there was a stable commercial occupancy rate in downtown Little Rock, but “no significant new office space construction.” The fed’s contacts also said that “a major grocery store chain is moving forward with plans to build a warehouse in Springdale.”

In the state’s agri sector, the report noted that district farmers will plant fewer acres of corn and cotton this year than in 2014. In particular, Arkansas and Mississippi farmers said they were significantly behind in their corn plantings as of late March due to very wet conditions.

Another interesting note in the mining sector, which is usually combined with agri statistics, showed that district coal production for February was about 7.5% lower this year – a national trend that has elevated the status of natural gas power generation.

The most troubling news came from the anecdotal report on employment, wages and prices across the district. “Most new jobs have been announced in the retail and service sectors, while layoffs have been announced in the manufacturing sector,” the report said. “A manufacturing contact in Little Rock suggested that it has become increasingly difficult to hire and keep quality staff.”

To read the full report, click here.

MANUFACTURING MERRY-GO-ROUND: FORD EXPANDING IN MEXICO
While Chinese-owned Volvo is planning to soon announce that it will locate a new $500 million auto plant in the U.S., America’s own Ford Motor Co. said on Friday that it plans to spend $2.5 billion to expand two of its manufacturing operations in Mexico and add nearly 4,000 jobs to the carmaker’s global payroll.

With the Ford expansion, where the U.S. automaker now builds its Fusion and Lincoln MKZ sedans and Fiesta subcompact, the fast-growing Mexican auto manufacturing sector is drawing billions of dollars in new investments. GM, Nissan Motors and Volkswagen also have moved plants from the U.S. across the Mexican border, which has also caused auto parts suppliers to follow their lead.

Earlier this year, Superior Industries closed its wheel making facility in Rogers and completed the transfer of more than 500 jobs to a $35 million state-of-the-art facility in Chihuahua, Mexico. Incidentally, the expansion announced by Ford last week includes $1.3 billion to build a new engine factory and expand existing operations in Chihuahua.

Ironically, it was Ford that sold Volvo to China’s Zhejiang Geely Holdings in 2011, who said it plans to build the plant in the U.S. to be more competitive in the global market. Fellow luxury automakers like BMW and Mercedes Benz have already built large auto facilities in the U.S. in the last decade to satiate the car-hungry U.S. market and also strengthen their global outreach.

Of course, Japanese automaker Toyota now has auto plants in the U.S., Canada, Mexico, Argentina, Brazil, South Africa, France, Russia, Turkey and just about everywhere the world’s largest automaker sells cars.

According to the U.S. International Trade Administration, U.S. factories exported 2.1 million new made-in-the-USA vehicles valued at $57.5 billion last year, up from 1.95 million vehicles worth $52.5 billion in 2013. Exports have more than doubled in the past five years. In 2009, only one million new vehicles were exported.

EPA VISITS ARKANSAS TO OUTLINE PROPOSED HAZE PLAN
Representatives of the Environmental Protection Agency regional office in Dallas spent an entire day in Little Rock listening to comments from Arkansans on the pros and cons of the federal agency’s proposed rules to clean up haze in the state’s national parks and wilderness areas.

The EPA proposed guidelines that were published in the Federal Register on April 8 reject a portion of ADEQ’s haze plan, called Best Available Retrofit Technology, or BART. The EPA said the state plan should have made “reasonable progress” toward protecting the Arkansas Buffalo National River, Ouachita National Forest and Caney Creek wilderness area from haze and the harmful effects of pollution. The proposed guidelines also address “downwind” haze problems from Arkansas power plants and factories that cross state lines.

Under the BART plan, ADEQ proposed retrofitting nine units and six mills and power plants across the state to meet the EPA requirements to reduce 71,500 tons a year of sulfur dioxide emissions and up to 15,000 tons of nitrogen oxide annually.

COUNCIL ACCEPTING APPLICATIONS FOR GOVERNOR’S AWARD ON GLOBAL TRADE
The Arkansas District Export Council is now accepting applications for the 2015 Governor’s Award for Excellence in Global Trade. The award, which is held annually at the Governor’s Mansion, recognizes exporting excellence among Arkansas manufacturers.

The only eligibility requirement is that you must be an Arkansas based company that is actively selling in international markets. Applicants must also complete a one page narrative about how their company has developed innovative approaches to doing business internationally, grown their international business consistently, or currently operates a significant portion of their business in the international marketplace. Applicants can also provide any other “inspirational” information about their company, officials said.

Applications for the annual award will be accepted through Friday, April 24. Applications are available at the Arkansas District Export Council website here.

Winning companies will be presented with a trophy during the awards luncheon in May, which also provides an opportunity for company representatives to meet with other business leaders and entrepreneurs from across the state to exchange ideas and experiences in the exporting arena and beyond.