‘Remarkable growth’ noted in Arkansas’ construction sector to begin 2024

by Michael Tilley ([email protected]) 71 views 

Info in The Compass Report for the first quarter of 2024 suggests that Arkansas’ construction sector could be “a major Arkansas business story,” according to economist Greg Kaza. His view is shared by a vice chancellor at the University of Arkansas at Fort Smith (UAFS).

According to the soon-to-be-released first quarter The Compass Report, the state had an increase in construction sector jobs – excluding natural resources and mining – with January 2024 reaching 67,500 jobs compared to 61,200 in January 2023. The trend continued in February and March with 68,000 jobs in each month, up from 61,500 and 61,900, respectively, in 2023.

The Compass Report is a partnership between the UAFS and Talk Business & Politics. First National Bank of Fort Smith sponsors the statewide report. Kendall Ross, UAFS associate vice chancellor of Economic and Workforce Development, and Troy Rodriguez, data analyst for the UAFS Center for Economic Development, compile the report quarterly. (Link here for previous reports.)

The report, which is set to be released Monday, June 17, also saw gains in building permit values in the state.

“January 2024 saw a decrease to $199.422 million from $219.964 million in January 2023. However, February and March showed significant growth, with February rising to $258.245 million from $208.247 million in 2023, and March increasing to $283.460 million from $176.973 million in 2023,” according to The Compass Report.

Kaza, who is also executive director of the Arkansas Policy Foundation, said the “growth in building permits is an important development in the report, with bullish updates from all four metropolitan areas.”

“This development warrants close attention given jobs growth in Arkansas’ Construction sector in the current economic expansion that started in May 2020,” Kaza wrote in a note to Talk Business & Politics. “Growth in Construction employment is significantly higher in the current expansion than at the same point in the previous cycle. At the four-year mark of the last expansion (June 2013), Arkansas’ Construction sector shed 5,100 jobs. At the four-year mark of this expansion (April 2024), Arkansas’ Construction sector added 16,800. Arkansas Construction jobs have expanded 32.7 percent this cycle, nearly double the state’s total employment growth rate of 17.4 percent.”

Ross said “remarkable growth” in building permit values and construction sector employment did combine to be a clear bright spot in the quarterly report.

“From Fort Smith to Northwest Arkansas, Central Arkansas, and the Jonesboro Metro area, we’ve seen significant increases in construction employment and strong performance in new housing starts. As we continue to build and develop, the construction industry remains a vital contributor to the prosperity and growth of our state,” Ross said.

Rodriguez said the numbers also point to a healthy housing market even with the headwinds of higher interest rates and inflation.

“Housing prices have soared to record levels year-over-year, but the surge in building permits and construction activity shows the resilience and dynamism of our housing market,” he said.