Business

Wind energy lines to be made in Arkansas

Clean Line Energy announced an agreement Thursday (mar. 24) in which the company will purchase cable manufactured at General Cable’s Malvern, Ark., facility for its Plains & Eastern Clean Line….

Gains continue for national truck tonnage index

Freight tonnage hauled by American trucking companies during the first two months of 2011 is up 5.9%, despite a 2.9% dip in February’s Truck Tonnage Index. The American Trucking Associations’…

Inflation threat looms over Arkansas, U.S. economy

story by Wesley Brown [email protected] As Arkansas’ economy begins to regain solid footing following the longest downturn since the Great Depression, Arkansas consumers now have something else to worry about…

Malvern Company Picked For $100 Million Wind Transmission Project

Clean Line Energy announced an agreement today in which the company will purchase cable manufactured at General Cable’s Malvern, Arkansas, facility for its Plains & Eastern Clean Line. The transmission line will run from the Oklahoma panhandle through Arkansas to Tennessee.

Clean Line President Michael Skelly and General Cable North America President Gregory J. Lampert announced the signing of a memorandum of understanding during a Thursday morning news conference at The Peabody Little Rock.

Clean Line, based in Houston, Texas, will deliver wind energy produced in western Oklahoma, southwest Kansas and the Texas panhandle to consumers across the Mid-South and the Southeast regions through its Plains & Eastern Clean Line transmission project.

Noting Arkansas’ manufacturing role in the wind energy business, which includes LM Wind Power, Nordex and a forthcoming Mitsubishi plant, economic officials welcomed the Clean Line project’s Arkansas connection.

"The Plains & Eastern Clean Line brings economic growth and new jobs for Arkansans," said Maria Haley, Executive Director of the Arkansas Economic Development Commission. "I am pleased to see Clean Line and General Cable partnering to stimulate the manufacturing industry in Arkansas through new opportunities for wind energy in the region."

General Cable’s Malvern plant has 330,000 square feet of manufacturing and warehouse space on an 80-acre site. The plant originally was opened in 1967 to manufacture high-voltage bare aluminum overhead conductors and was expanded in 1969 to produce low-voltage and medium-voltage insulated cables. The plant currently has 152 employees.

The supply order for the Plains & Eastern Clean Line could be worth $100 million or more depending on commodity prices. Construction is expected to begin in 2013 and continue over the next few years. All told, as much as 25 million conductor feet of cabling lines may be made to serve the order.

Clean Line estimates that property taxes on the transmission lines will generate millions of dollars annually in Arkansas. Property taxes for utility infrastructure in Arkansas are assessed by the Public Service Commission and will be distributed to counties where the line is routed. The route has not been finalized yet.

"Our alliance with General Cable is a clear indication of the many benefits that Arkansas will realize as a result of the Plains & Eastern Clean Line," said Clean Line President Michael Skelly. "This marks our first preferred vendor agreement and we are very glad and proud to commence a relationship with General Cable."

"We look forward to continuing to create opportunities for more renewable energy and working with Arkansas authorities and state leaders as the project evolves," Skelly added.

Inflation Threat Looms Over Arkansas, U.s. Economy

As Arkansas’ economy begins to regain solid footing following the longest downturn since the Great Depression, Arkansas consumers now have something else to worry about — inflation.

Arkansans have to dig deeper into their pockets for everything from coffee, ketchup and peanut butter to running shoes, baby diapers and toilet paper. And of course, there is the continuing upward march toward $4 a gallon for regular unleaded at the pump.

On Thursday (Mar. 24), the U.S. Bureau of Labor Statistics (BLS) reported that consumer prices for the month of February 2011 were up 2.11% on a year-over-year basis compared with February 2010.

FED PERSPECTIVE

February’s year-over-year increase of 2.11% was up 29% from January’s year-over-year increase of 1.63% and is now above the Federal Reserve’s informal inflation target of 1.5% to 2%.

Despite those numbers, Federal Reserve Chairman Ben Bernanke has openly downplayed inflation concerns, recently saying “the measures of underlying inflation have been subdued.” The Federal Reserve’s Open Market Committee, which sets the nation’s monetary policy, voted to maintain the status quo at it latest meeting.

“Information received since the Federal Open Market Committee met in January suggests that the economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually,” the Fed’s board of governors said in a statement after their March 15 meeting.

Specifically, the committee reiterated its existing plan to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The board of governors also voted to maintain the target range for the federal funds rate at zero to 0.25%.

“The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate,” said the board, which Bernanke chairs.

FOOD, ENERGY PRICE CONCERNS

Greg Kaza, economist for and executive director of the Arkansas Policy Foundation, generally agrees with the Fed’s assessment that the threat of inflation won’t cool the current expansion yet believes rising food and energy prices could be a thorn in the side for the economy.

“It’s possible that rising commodity prices could harm the recovery but there is no evidence the economy is entering a recession,” Kaza said. “The coincident indicators (payroll employment, industrial production, real income less transfer payments and wholesale-retail sales) are more important, and they show expansion.”

Still, some economy watchers in Arkansas and elsewhere are concerned that the Fed’s monetary policy on underlying inflation doesn’t fully take into account food and energy prices – every day pocketbook items for most consumers.

COMMODITY PRICES

Dr. Michael Pakko, chief economist for Institute for Economic Advancement at the University of Arkansas at Little Rock and the Arkansas economic forecaster, has tracked rising commodity prices for at least a few months now.

“The increases are remarkable,” Pakko said, a former staff economist for the Federal Reserve in St. Louis. “The big price increases in food prices began around the middle of last year.”

From his analysis of the International Monetary Fund (IMF) data between July 2010 and February 2011, Pakko said wheat prices are up 120%, corn prices have jumped 92% and the overall IMF commodity food price index is up over 40% over the same period.

The price spikes are not limited to food commodities either.

“Cotton prices have more than doubled. In combination with recent increases in world oil prices, these price hikes pose some significant risks for the U.S. economy,” he said.

The chief economist at The Conference Board agrees with Pakko’s analysis, saying the latest data points to an improving economy through the summer. Yet, U.S. consumer confidence still faces “strong headwinds,” said Conference Board economist Ken Goldstein.

“Headwinds continue to include a still weak housing market and renewed concerns about the negative consequence of high and rising energy and food prices,” said Goldstein. “The net result is likely to be moderate economic growth with an uptick in inflation. This could potentially trim a few tenths of a percent from GDP growth over the next few quarters.”

The recently released Arkansas Consumer Confidence Quarterly Report showed that 41% of Arkansans polled in the survey indicated they would be spending more money on consumer goods in the next 6 months – either a sign of inflation anticipation or a prediction that expected needs would force increased spending.

FUTURE PRICE HIKES

Meanwhile, the list of food and consumer goods companies planning to hike prices continues to grow. Nike, Starbucks, Kraft Foods, Kimberly Clark and Tyson Foods have all recently announced price hikes.

Pakko said those price increases are concentrated in specific commodities and have not spread to the broader economy.

“In each case, there is typically a story (or stories) about idiosyncratic supply and demand conditions that are responsible for the price increases” he said. “Taken as a whole, however, they are likely to have a significant impact on the cost of households’ typical consumption bundles.”

On the other hand, Pakko said the rise in commodity prices have not fully benefitted rice, cotton and other agriculture producers in Arkansas. Beef producers are seeing somewhat better conditions with prices up nearly 27%, he said.

Still, the Arkansas economist expressed some concerns that rising commodity price increases could be a precursor of a more general surge in inflation.

“If you ask Federal Reserve officials about inflationary concerns regarding rising commodity prices, they are likely to mention low resource utilization and ‘well-anchored’ inflation expectations as factors that are acting to prevent an outbreak of general inflation,” Pakko said. “But with the economy recovering, with households facing ever more evident price increases, and the Fed continuing to focus on employment instead of inflation, I see an outbreak of inflation as a very real threat to the U.S. economy.”

Wesley Brown is the author of this article. He can be reached by e-mail at [email protected].

Winter Storms Hurt Trucking Firms In February

Freight tonnage hauled by American trucking companies during the first two months of 2011 is up 5.9%, despite a 2.9% dip in February’s Truck Tonnage Index.

The American Trucking Associations’ For-Hire Truck Tonnage Index decreased 2.9% in February after increasing a revised 3.5% in January 2011. In January, the index equaled 116.6. During December 2010 and January 2011, the tonnage index jumped a total of 6.1%.

Compared with February 2010, tonnage climbed 4.2%, although this was smaller than January’s 7.6% year-over-year increase. Through the first two months of the year, tonnage is up 5.9% compared with the same two months last year.

For all of 2010, tonnage was up 5.7% compared with 2009. In 2009, the index plunged 8.7%.

Continued relative gains in the closely watched trucking sector report are good news for Fort Smith-based Arkansas Best Corp. and Van Buren-based USA Truck Inc. The two trucking companies that employ hundreds in the Fort Smith region and thousands nationwide have struggled financially during a freight recession that began in late 2006.

ATA Chief Economist Bob Costello said winter storms, not economic factors, in February probably reduced the index. He also said anecdotal reports from trucking companies are “very encouraging.”

“Tonnage is not going to increase every month and in general I’m very pleased with freight volumes early this year,” Costello noted in the ATA statement. “I’m hearing a significant amount of positive news from fleets and that the largest concern continues to be the price of diesel fuel, not freight levels.”

According to the ATA, trucking serves as a barometer of the U.S. economy, representing nearly 68% of tonnage carried in 2008 by all modes of domestic freight transportation, including manufactured and retail goods.

State personal income growth jumps 3.5% in 2010

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1% signature deadline extended, 4,000 signatures expected

The group of restaurant owners attempting to force an election on enactment of a 1% prepared food tax in Fort Smith have about 3,000 signatures collected and hope to have…

Investors offer advice, praise for Pryor jobs bill

story by Wesley Brown [email protected] Startup executives and venture capitalists are nearly unanimous in their glowing support of U.S. Sen. Mark Pryor’s recent proposal to give tax breaks to so-called…

Ua Hires Mike Anderson As Head Basketball Coach

Just 10 days after John Pelphrey’s dismissal, the University of Arkansas has announced a replacement for its head men’s basketball coach, former Nolan Richardson assistant and University of Missouri coach Mike Anderson.

UA Vice Chancellor and Director of Athletics Jeff Long made the announcement on Wednesday:

In nine seasons as a collegiate head coach at the University of Alabama-Birmingham (UAB) and most recently at the University of Missouri, Anderson has amassed a career record of 200-98, earning 20 wins in a season seven times and leading his teams to the NCAA Tournament in six of his nine seasons as a head coach.

“We are extremely excited to welcome home Mike Anderson to the University of Arkansas as our new head men’s basketball coach,” Long said. “Mike is one of the outstanding head coaches in college basketball. His teams play an exciting brand of basketball that has already proven successful at both UAB and Missouri.

“Under Mike’s leadership, I am confident the Razorbacks will be successful in the future on and off the court. The decision to hire Mike Anderson as head coach is based on my firm belief that he is the right person to lead the Razorback program today and in the years to come,” Long added.

“It is a tremendous honor to be named the head men’s basketball coach at the University of Arkansas,” Anderson said. “I want to thank Chancellor (Dave) Gearhart and Athletic Director Jeff Long for this opportunity to lead the Razorback Basketball program. I am extremely excited to once again be a part of this special University and Razorback Athletics. With the continued passionate support of all Razorback fans, I am confident that we will have the opportunity to succeed on and off the court and continue to build on the University of Arkansas’ championship tradition.”

Anderson’s record after his five-year stint at Missouri was a combined 111-56 (.665) and included 13 wins over ranked opponents, four NCAA Tournament victories and a 75-13 record at home.