Things are hot in Northwest Arkansas, and the rest of the state is doing well too, University of Arkansas economist Kathy Deck reported at the Quarterly Business Analysis Luncheon on May 27 at the Hilton Garden Inn & Conference Center in Fayetteville.
Deck is director of the Center for Business and Economic Research (CBER) at the UA’s Sam M. Walton College of Business in Fayetteville.
The luncheons are a partnership between the CBER and the Northwest Arkansas chambers of commerce.
Deck said the unemployment rate is 2.9 percent in Northwest Arkansas and 3.9 percent statewide, faring better than the national unemployment rate, which has hovered around 5 percent.
“Things are not just good here, but everywhere,” she said. “Central Arkansas is pulling its weight.”
The state labor force is breaking recent cycles by growing much faster than national, including in rural areas.
“Of course, we continue to see Northwest Arkansas just do fantastic from a growth perspective,” and the Jonesboro metro area is also thriving, Deck added.
Fort Smith’s job market, however, is still struggling to recover following the Whirlpool plant closing in 2012, Deck said.
In real estate, the home ownership rate “doesn’t look like recovery from a recession,” but “the number of houses sold is on fire,” with numbers reaching 2007 levels, Deck said, adding that the added activity does not necessarily mean the economy is in danger of a crash.
“We have a lot more people than we did in 2007, so it doesn’t mean ‘bubble’ just because there’s a lot of activity,” Deck said.
“I’m not one who subscribes to the idea that there is a disproportionate risk for recession right now,” she said. “I am going to be in the camp of continued, plodding along, we wish it was faster but it’s not, growth throughout the rest of 2016 and into next year.”
Deck expressed satisfaction with growth in the business and professional services sector, as well as the trade, transportation and utilities industries.
“That’s bread and butter for us,” she said, and it makes her “worry less” about the size of the construction industry, which she deems as disproportionately large, but not at an alarming level.
Deck also pointed to poor performance in the energy sector and also manufacturing, a sign of tough economic times internationally but also a change in the relationship between low oil prices and manufacturing.
Historically, lower prices oil prices helped the manufacturing industry, but that was not the case in recent months, as a lot of the industry has been serving the energy sector by building pipelines and infrastructure.
However, Deck expects modest improvements during the next three to six months, due to an improving local economy and stabilized energy industry.