The state of the state’s economy has been contradictory and in flux for nearly two years. In many ways, it has been impaired and derailed; on some fronts, business has never been better with certain services and products in high demand.
Headed into 2022, business leaders agree that a rough ride remains. The healthcare sector is under immense pressure, while supply chain complications continue to affect the flow and price of goods. Large and small businesses are figuring out how to navigate in the new economy, but the parameters for commerce are still changing.
Talk Business & Politics Editor-in-Chief Roby Brock sat down with three leaders in business circles – Arkansas Center for Health Improvement CEO Dr. Joe Thompson, Arkansas Trucking Association President Shannon Newton, and the Arkansas Director of the National Federation of Independent Businesses Sylvester Smith – for their insights on what to expect and what they hope for as the new year unfolds.
TB&P: Shannon, We’ve seen a federal infrastructure package pass. We have seen the state make an investment, in large part thanks to your leadership and the trucking industry’s leadership, in a highway plan that is finally starting to put some orange barrels on the roads out there. What are your expectations for how infrastructure investment can make a difference, not only for your industry, but for the overall economy?
Shannon Newton: I do think that perhaps in amongst the other headlines, the accomplishment and the significance of the infrastructure bill that recently passed, may have been a little bit lost in the shuffle of other competing headlines. I do think that you’re going to see money faucets are going to flow. As soon as that money is appropriated, you’re going to see historic levels of funding become available for road transit and a lot of other modes of transportation.
I think there’s going to be a little bit of a push here initially in 2022, to places where that money could be spent immediately to have any sort of meaningful impact on the supply chain crisis, or crunch that we’re currently experiencing. Are there ways to invest in ports or in technology to help the modes communicate better with one another? I think that’s probably the most immediate opportunity for those funds to make an impact that would be felt by average consumers.
On a broader spectrum, if we’re looking at a driver shortage, you asked about maybe some ways to address that or improve that, that are available to us. I think maximizing the driver’s time in things other than sitting in congestion or taking out-of-route miles or waiting at a shipping or delivering facility needs to happen. I think there’s a report out now that says, even though a driver can drive 11 hours, the average driver is actually driving about seven hours of their available time a day because they’re spending that other time in inefficient ways.
TB&P: Sylvester, infrastructure has a lot of potential ramifications for folks you represent, particularly the small businesses we talked about.
Sylvester Smith: I believe it’s going to be a gift and a curse. On the one hand, if you’re a hotel, some sort of service industry business in one of those areas where the dollars are being allocated, good for you, your coffers will be full. However, to Shannon’s point, it’s also going to create a lot of jobs. Our small business optimism index shows 48% of my members are saying they’ve got jobs they can’t fill. That’s only going to add additional pressure on our very limited labor force.
I hate to be the glass is half-full guy. I like to be Mr. Hopeful and optimistic, but the truth of the matter is that’s going to be a beautiful thing for us long term, but there’s going to be significant short-term pain that we’re going to have to deal with as we get to the light at the end of this economic influx tunnel.
I would like to piggy-back on something Shannon said. This transition to goods going that extra mile, that’s also created a lot of new entrepreneurs. People see the opportunity to start a small courier service or delivery company. Some of those folks typically would have been workers that would have worked for the people we represent. Now, they’re taking the opportunity to work for themselves. So our economy is shifting and that’s a beautiful thing for our country and it’s an exciting thing for these new entrepreneurs.
TB&P: Joe, you talked about healthcare infrastructure and public health infrastructure. I suspect broadband’s a big part of that, but talk to me about how you see the infrastructure debate that’s been taking place, having some impact on health.
Dr. Joe Thompson: I think a positive of the pandemic and the healthcare industry is really it shook the industry to adopt technology that it had been resistant to do before. During the initial pandemic, when clinics were closed and access points were restricted, we opened up the doors for telemedicine to allow the delivery of care where possible through telemedicine visits, through other activities. I think there will be a lot of pressure on doctor’s offices not to have folks sitting in the office for two hours once they’ve experienced the ability to sit in their home and have the visit happen via televideo situation.
That does require though broadband access. And if we’re going to avoid disparities for rural Arkansans and lower income communities, we’re going to have to make sure and find a way to have affordable and accessible broadband access in those communities to allow the technology to deliver medicine across our state for all.
I think some of the other technologies that we’ve gotten, the vaccine breakthrough here, I don’t think it can be understated that the new technology of being able to profile a virus and the RNA fingerprint, if you will, of that virus or the spike protein of that virus, create a response and deliver it within a period of less than a year. That is a dramatic new technological advance.
TB&P: Everybody gets to make some crystal ball predictions. We’re here at the beginning of 2022. Tell me, what are we going to be talking about as we head into 2023?
Dr. Thompson: I think we will come out of January and we will recognize that some of the strategies that we have employed, we need to identify ways that we can easily and rapidly employ them when we need masks requirements for vaccinations and other things. Then we can relinquish those when we don’t need them. I think we’re going to have advances and accelerations in the healthcare system. I think you’re going to see changes in the way that doctors and hospitals are paid so that there is an investment in the resiliency of the healthcare system, not just the per unit provision of care in the healthcare system. And finally, I hope we have an ability to get beyond the misinformation and disinformation that has permeated our conversations, largely influenced by politics, and get back to where we’re building a common understanding of how we work together to optimize the economic vitality and the quality of life that we all strive to attain for our families.
Newton: I will focus on the economic indicators because that’s something that drives our industry. When the economy is doing well, our industry tends to do well. And when the economy is not doing well, the demand for our services declines. I think the year for our industry is ultimately going to depend upon how the cycle of consumer spending trends.
We’ve experienced a long period of economic recovery and growth, where there has been some organic growth and then additional funds pumped into the economy, which has created this environment in which our industry has done really well and experienced rate increases and margin increases.
But if inflation or if pandemic circumstances, or if something turns the tide on that consumer spending, I think that will determine success. Whenever that retraction of consumer spending does come, to what extent does that impact the economy? Do we return to something normal or do we face some sort of regression? I don’t know the answer to that question. In the meantime, our industry is going to continue to deal with this outpacing of demand and do the best we can with the resources that we have to move products safely and efficiently.
Smith: I’m going to talk about the one thing that the other two guests didn’t and that’s politics. If you’re a conservative in Arkansas or in our great nation, you’re going to be very optimistic. Here in Arkansas, at the end of 2022, we’ll be working at swearing-in our first female governor, which would be Sarah Huckabee Sanders. The Republicans are going to sweep, once again, all of the statewide offices and all of the Congressional seats. Nationally, I believe America will push back to the left-leaning policies of President Biden, Speaker Pelosi, and their liberal friends in the Senate, and we’ll see Republicans re-take the House and retake the Senate. I’ll be very hopeful that my compatriots in the Republican party recognize they’ll be operating on a short leash in Congress and that they do something with these new majorities.
You can watch Part 1 and Part 2 of our State of the State Executive Roundtable in the videos below.