Modest Growth Seen for Arkansas Economy

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Kathy Deck, director of the Center for Business and Economic Research, speaks at annual Business Forecast luncheon

FAYETTEVILLE, Ark. – The forecast for the Arkansas economy in 2015 reflects the positive trends that have driven the United States economy to new employment highs, said Kathy Deck, director of the Center for Business and Economic Research at the Sam M. Walton College of Business.

Deck said the rate of employment growth in the state will continue to lag that of the nation and that the Arkansas economy will show modest growth in 2015. The state’s industrial mix and workforce quality are the keys to both short- and long-term prosperity within Arkansas, Deck said in her analysis of the regional economy at the center’s 21st annual Business Forecast luncheon on Friday.

As a region, Northwest Arkansas has been experiencing an employment recalibration among its major employers that should set the stage for reasonable employment gains over the next 12 months, Deck said.

“The forecast for Arkansas in 2015 is one of reasonable growth,” Deck said. “By the end of the year, Arkansas will be very close to reaching its prerecession employment high. Northwest Arkansas continues to grow, although there has been some job loss in the key trade, transportation and utilities sector. The restructuring of some of our key companies will set the stage for measured job growth in 2015.”

Deck shared additional insights about the Arkansas economy at Friday’s event in Rogers, attended by nearly 1,000 business and government leaders:

• In 2013, growth in Arkansas per capita personal income just kept pace with growth in the U.S. average. The latest measure in Arkansas stood at 81 percent of the U.S. average.
• Arkansas gross domestic product (GDP) continued to be more concentrated in agriculture, construction, manufacturing, trade and transportation, management of companies, other services and government than the U.S. average.
• The pace of employment growth in Arkansas means that by the end of 2015, the state should just have reached its prerecession employment highs.
• There were net job losses in the financial and information sectors in Arkansas in 2014.
• Despite these losses, the unemployment rate in Arkansas has fallen to 5.6 percent from its post-recession high of 9 percent.
• Although the Arkansas labor force declined on a year-over-year basis for every other month in 2014, in December the labor force was higher than it was at the same time in 2013.
• In 2014, employment growth was positive in central Arkansas, Northwest Arkansas and Jonesboro, but negative in Pine Bluff and Fort Smith.
• In Northwest Arkansas, the manufacturing, trade, transportation and utilities and information sectors had employment declines on a year-over-year basis in 2014, but overall employment grew by 1.4 percent.
• Economic growth in 2015 will continue to be led by construction, leisure and hospitality and professional and business services.

The Center for Business and Economic Research coordinates the annual Business Forecast luncheon so that leaders can hear top economists give their insight into the economic conditions in the state, nation and world over the next year.

The center is a public service/outreach organization whose mission is to serve its constituents with the highest quality research support; basic and applied business and economic analysis; timely, relevant business, economic and related public policy information; and other outreach activities.

In addition to supporting research within the college, the center supports economic development by providing economic and demographic data and analysis to business, government and individuals. The center also actively works with the economic development community of the state to build Arkansas’ capacity to create high-wage, high-skill employment.