Editor’s note: Randy Zook, President and CEO of the Arkansas State Chamber of Commerce and Associated Industries of Arkansas, is the author of this guest commentary. A video interview of Zook appears at the bottom of this post.
Arkansas’ economy is performing at a level that looks like much of the developed world: muddling through and doing OK with bright spots here and there.
Slow but steady improvement fairly describes most major sectors, including manufacturing, retail and hospitality. Health care and auto sales are fairly strong. The farm sector is facing tougher conditions due to significantly lower crop prices. Housing starts remain below healthy levels. And we all know that energy prices, namely oil and gas, are dramatically lower than a year ago, meaning good news for many and bad news for those involved in production of these fuels.
So all in all, it is a mixed bag but positive, if only modestly so. Thank goodness for the economic engine in Northwest Arkansas.
Sub-par growth in national numbers continues to constrain Arkansas’ growth. The Federal Reserve maintains short-term interest rates at 0% for fear of sending the economy back into recession. Job growth seems to have slowed just as it looked as if we were headed toward better results.
Some observers argue that the Fed is out of ammo at this point in the recovery and only fiscal policy changes have the potential to accelerate growth. Those changes include trade policy to open up more markets for U.S. goods. Other options include corporate tax reform and slowing the pace of burdensome regulations from the EPA, National Labor Relations Board and other non-legislative sources. Infrastructure investments, starting with highways, offer enormous potential for stimulating growth if we can just come to reasonable terms politically.
THE NEED FOR SKILLED WORKERS
One of our greatest opportunities in Arkansas centers on our workforce training and development efforts. Arkansas businesses all over the state are hampered due to the shortage of people with the right skills to fill jobs that are available. Diesel technicians, welders, truck drivers, manufacturing technicians, CNC machine operators, heavy equipment operators and many others are in short supply.
While college degrees for more people are desirable, there are many paths to success that do not require a degree; training beyond high school, yes. And top-quality, world-class training with current-generation equipment, first-rate instructors and state-of-the-art technology is a must. The good news is that K-12 educators, community college leaders and policymakers are awakening to these realities and moving on many fronts to improve their offerings. This is exciting progress that will yield big dividends sooner rather than later.
Beyond workforce development efforts, where are the best opportunities in Arkansas’ economy? Business formations, new business startups, continue to lag historical trends. How can we create conditions that encourage people to take risks, make investments and pursue dreams to own and lead businesses?
There are a number of ways to do this, some starting in the classroom. Teachers need to better understand and teach the advantages of our free-enterprise system in order to encourage more young people to aspire to start and grow their own businesses. The surest way to control your own destiny: be your own boss.
Gov. Asa Hutchinson has set his top priority as making Arkansas the most attractive state for new job creation. He is leading a revitalized effort at the Arkansas Economic Development Commission to attract more businesses to the state. At the same time, he is urging other state agencies to make Arkansas as cooperative and helpful as possible in order for existing businesses to grow and prosper. These are very significant developments.
So clearly there are positive, encouraging efforts underway all over Arkansas that will help us move faster toward the ultimate goal of reaching our full potential as a state and as a people. If we can just muddle our way through the political mine field of the upcoming presidential campaign…