Arkansas cities in danger of double-dip recession; Fort Smith safe

Little Rock and Pine Bluff are on a short list of U.S. metropolitan areas in danger of dipping back into a recession within three months, according to a recent report by leading economic forecaster.

Hot Springs is on the list, but a published report suggests the spa city may receive a positive adjustment.

Moody’s Economy.com recently published a report that shows the three central Arkansas cities among 22 U.S. cities at risk of plunging into a "double-dip" recession. Arkansas and Alabama were the only two states with more than one city on the list, three and two, respectively.

According to CNNMoney.com, the at-risk cities are spread across the country, though more than half of the cities are in the South, and five are concentrated in the Midwest.

"With chances of a national double-dip recession now estimated at about one in four, several metro areas will probably experience their own downturns in the first half of 2011," said economist Andrew Gledhill, author of the report.

The report cited Little Rock as a city “with no clear economic driver” and housing market with signs of “moderate stress.” Pine Bluff’s weaknesses included “negative migration trends” and below average income levels. Hot Springs’ economy lacked “valued-added” industries whose housing market included too many vacation homes. The Arkansas resort city’s workforce also received negative for low income levels and a shortage of skilled workers.

However, the Hot Springs Sentinel Record is reporting that Moody’s is revising its report on Hot Springs. Brent Campbell, an assistant economist at Moody’s, says in the newspaper report that new figures for the second quarter show Hot Springs “in recovery, rather than in recession.”

Overall, the report said Arkansas has entered recovery due to the return of non-durable manufacturing sales and a sound fiscal budget. It added that Arkansas’ agricultural sector will expand over the next few years, but steady growth in the state’s unstable housing market will remain elusive until 2012.

The report also listed Jonesboro, Fort Smith and Fayetteville among the U.S. metropolitan areas headed toward a full recovery. For example, Fayetteville and Northwest Arkansas were applauded for being the headquarters for several industry leaders, such as Wal-Mart and Tyson. It also touted the regions efforts to attract high-paying, technology-based industries.

Fort Smith was commended for being a major U.S. transportation hub, and for affordable living. The report lauded Jonesboro for attracting new residents with affordable housing and low-cost of living, and spotlighted Arkansas State University for providing stability for the entire region.

The 22 troubled cities, according to Moody’s, are:
• Missoula, Mont.
Western city with a timber industry highly exposed to domestic housing market

• Salem, Ore.
Western city with dependence on timber and food-processing industries

• Idaho Falls, Idaho
Western city with a high reliance on government funding

• Lake County-Kenosha County, Ill.-Wisc.
A rust belt city with exposure to manufacturing

• Lafayette, Ind.
Rust belt city with limited industrial diversity

• Wichita, Kan.
Low industrial diversity and below-average earnings

• Hot Springs, Ark.
Resort city with a shortage of well-educated workers

• Pine Bluff, Ark.
Southern city with negative migration trends and no clear economic driver

• Little Rock, Ark.
Southern city with no clear economic driver

• Wichita Falls, Texas
Poor demographic trends and exposure to the energy industry

• Akron, Ohio
Midwestern city with poor population trends and exposure to rubber and plastic industries

• Charleston, W.V.
Mining center with low education levels

• Macon, Ga.
Southern city with exposure to manufacturing

• Gadsden, Ala.
Southern city with exposure to manufacturing

• Gulfport-Biloxi, Miss.
Tourist city, hurting after hurricanes and oil spill

• Mobile, Ala.
Southern city with a low-skilled workforce and high consumer debt

• Lebanon, Pa. – Mid-Atlantic city with low education levels and an aging workforce

• Springfield, Ohio
Midwestern city with a declining population and heavy exposure to energy-intensive manufacturing

• Wilmington, N.C.
beach town with high economic volatility and low-paying jobs

• Anderson, S.C.
Southern city with low education levels and exposure to manufacturing

• Athens-Clark County Ga.
Southern city with exposure to manufacturing