Economists Talk Recovery at Forecast Conference

The state is poised for economic recovery, but some sectors will still struggle, according to forecasters Wednesday at the University of Arkansas at Little Rock Economic Forecast Conference.

UALR economic forecasters John Shelnutt and Dennis Robinson said the state's economy is close to seeing gains in business investment and consumer spending and that "the turnaround is at hand."

But the two said the housing sector and part of manufacturing and government service will lag behind the recovery.

Shelnutt and Robinson also said personal income will rebound. But nominal dollar measures and low inflation will limit revenue growth for state and local governments.

On the Arkansas jobs scene, the two reported that the state should see a "modest" recovery beginning in the second half of the year. The state's unemployment rate for April was 5.3 percent, which has slowly risen but remains below the national rate of 6 percent. The forecasters said future job gains will be limited to service-producing sectors and distribution.

The slow recovery in the state's job scene mirrors what forecasters predict will take place nationally.

Michael Donnelly, the senior economist and principal for Global Insight, reported that national job growth will be "weak," with recovery partly taking place due to restructuring and renewal in the service sector.

And while Global Insight expects the nation's economic recovery to gain momentum in the second half of 2003, it predicts hiring to remain depressed in the spring of 2004 as businesses try to make due with existing work forces.

Other speakers at Wednesday's conference and luncheon, which took place at the DoubleTree Hotel in Little Rock, include Skip Rutherford, who heads the William J. Clinton Presidential Library project; Dr. Ashvin Vibhakar, director of UALR's Institute for Economic Advancement; Roland S. Boreham Jr., chairman of the board for Baldor Electric Co. of Fort Smith; and Carl S. Brothers, senior vice president of international rice and partnerships at Riceland Foods Inc. of Stuttgart.

The event was sponsored by UALR and Arkansas Business Publishing Group.