"Local and State Economic Bright Spots Illuminate an Otherwise Dismal Economic Picture"
According to Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, and Georgia Hale, associate dean of the College of Business at the University of Arkansas at Fort Smith, the local economies of the River Valley area are not following the downward national market trends. These two women spoke at a First Friday breakfast last Friday, October 3, organized by the Fort Smith Regional Chamber of Commerce and sponsored by Arvest Bank.
The speakers were introduced by Arvest's Fort Smith market president, John Womack, who said that national markets may be in turmoil but now may be a good time for Arvest to acquire other suffering banks.
The Fort Smith Metropolitan Statistical Area's (Crawford, Franklin, and Sebastian counties in Arkansas as well as Le Flore and Sequoyah counties in Oklahoma) economy is "distressed by not down and out," according to Hale.
Roughly 6 percent of the manufacturing jobs in Fort Smith have been lost already this year, but other sectors are holding steady employment or showing some improvement, Hale said. Though the manufacturing sector makes up 20 percent of the area's economy, Hale thinks that it gets most of the attention even thought he trade and transportation sector makes up an equal share. It, along with other sectors like financial services, leisure and travel, and government, haven't seen any contractions.
Moody's Investor Services projected an area gross domestic product expansion from $7.9 billion to $8 billion from fourth quarter 2008 to second quarter 2010, Hale said. Hale also said that manufacturing may continue to decline, but she expects the service sector to expand. The number of western Arkansas and eastern Oklahoma business in the natural resource sector may lead to further expansion in that part of the economy if energy prices stay high.
Deck believes that companies involved in natural gas exploration and production or supporting it are well-located geographically to utilize runoff business from the increasing developments of the Fayetteville Shale Play in north central Arkansas and Haynesville Shale Play in both Louisiana and Texas. Deck also predicts further unemployment in the manufacturing sector but does expect them to moderate and decline their pace.
Trade and transportation jobs, since they rely on both manufacturing activity and the consumer sector, will experience muted employment growth, Deck predicts. As soon as the national economic numbers are released for the third and fourth quarters of 2008, economists predict they will show us to be in the early stages of recession.
Arkansas' housing sector is a "mixed package" but better-off than the national sector, and the state's comparatively strong employment levels are also "slightly counter-cyclical," Deck says.
Emma Watts, an assistant professor in the College of Applied Science and Technology at UAFS who attended the First Friday breakfast to hear Hale and Deck speak, says, "I feel better about the local economy (now), but the national economy is a little bit scary. The local economy eventually will be affected by the national economy."
