Expect No Recession in Northwest Arkansas (Jeff Hankins Publishers’ Note)

I spent two days visiting with business executives in Northwest Arkansas and received no indication whatsoever of a major economic slowdown for the region.

Vendors continue to expand their operations to support Wal-Mart Stores Inc., and they are taking on office space as fast as developers like Collins Haynes can develop it. Construction is under way on the new Washington Regional Medical Center facility and Reynolds-Razorback Stadium in Fayetteville among other projects. Technology consultants report brisk business as they focus on working with well-established companies instead of the dot-com start-ups that are falling apart across the country.

The housing market is being bolstered by low mortgage interest rates. Not surprisingly, my real estate friends in both Northwest and central Arkansas say the $200,000-and-less market is performing much better than the higher-end homes.

Consumer spending may be a different story, but overall, the trip was very encouraging at a time when the national media are preaching recession.

Federal Reserve Chairman Alan Greenspan has been a master of orchestrating “soft landings” with the economy through the control of interest rates. I’m betting he can pull it off again because low unemployment and increased efficiencies from technology remain the fundamental economic drivers. Also, I’m convinced the federal tax cuts proposed by President Bush would increase take-home pay and lift consumer spirits and spending.

As for Arkansas, it was good to see Gov. Mike Huckabee finally backing off the early revenue projections from the Department of Finance and Administration. No economist could reasonably forecast a rosy picture right now.

Little Rock-based Alltel Corp.’s announcement of 1,000 job cuts isn’t surprising when you consider the belt-tightening nationwide — and it sure beats what would be devastating news if Alltel ever sold. In some ways Alltel’s layoffs will help ease pressure on the central Arkansas labor market because the company has hired away dozens of professionals from smaller area companies during the past three years. This state isn’t short on opportunities for a well-educated, well-trained workforce.

Bottom line: Let’s continue to think slower growth but no recession.

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Hogs vs. ASU?

House Bill 1694, which would force intercollegiate athletic competition between the University of Arkansas and Arkansas State University, caught everyone off-guard.

Sponsored by state Rep. David Rackley, R-Sherwood, the bill was not proposed by ASU, although callers to sports talk radio shows have painted it as such. University president Les Wyatt learned about the bill only when a reporter inquired about it.

I was a senior at ASU in 1987 when a similar bill was proposed but failed. ASU was actively lobbying and behind the measure at that time. Soon after it failed, the National Invitation Tournament matched up the schools for a showdown at Barnhill Arena that is widely regarded as one of the greatest athletic events ever in Arkansas because of the emotions involved and the caliber of the game.

What makes this legislative effort interesting is that it appears to be a price that UA Athletic Director Frank Broyles pays for moving football games out of Little Rock and continuing to schedule weak nonconference opponents. Legislators from outside Northwest Arkansas might be inclined to “toy” with Broyles, then back down.

A number of central Arkansas business leaders have discussed efforts to sponsor a football game for ASU in Little Rock. The opponent might be a good crowd draw like, say, Rice University and Coach Ken Hatfield (you know, the former UA coach).

I’ll always contend the schools should play — just like all the other great in-state rivalries around the country. But, the Legislature has far more important issues at hand.