by Marty Cook
Posted 1/16/2014 02:50 pm
Updated 8 months ago
Arkansas' job growth prospects don't look particularly rosy in the immediate future, and a shrinking labor force isn't helping the state return to pre-recession levels, according to economists at the Quarterly Business Analysis Luncheon Thursday at the John Q. Hammons Convention Center in Rogers.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, gave the state forecast, calling for continued sluggish growth. Her presentation came after the national outlook by Richard Yamarone, an analyst with Bloomberg Brief. Yamarone said the United States' economy is on "thin ice" when it comes entering another recession.
"I'm going to do my presentation as if we're not entering a recession," Deck told the ballroom of around 900 business leaders and government officials. "I'm going to talk about the economy as if we're going to continue to slog along in this long, boring, not-good-enough recovery."
Yamarone cautioned that the nation is teetering because of a poor job outlook that has kept GDP growth around 2 percent, which he called the cutline for a recession. Deck said the key to economic success is job growth.
"Is 2 percent GDP growth wonderful? It is not," Deck said. "It is terrible. It does not generate enough jobs to employ all the people that could be employed in the United States."
Deck said she doesn't see a quick end to the shaky unemployment numbers in Arkansas.
"I have begun calling this excessive unemployment 'unwanted leisure,'" Deck said. "We will be beset by unwanted leisure going into 2014, going into 2015."
Deck said Arkansas' per capita personal income inched higher, close to 81.3 percent of the national average. Northwest Arkansas income reached 84.3 percent of the national average.
Arkansas gained 13,500 jobs in 2013, but Deck said the number is misleading. The additional jobs haven't brought the state near the pre-recession highs of 2008, and the state's total job force decreased.
"That doesn't get us out of our hole very quickly," Deck said. "There just isn't enough momentum in enough sectors to see the job gains that are going to get us back to pre-recession levels in the next couple of years.
"Things are improving slowly, but we really find ourselves in a holding pattern. Jobs in the state look very, very flat the next couple of years."
Deck said Arkansas is a manufacturing state, and that the sector remains under "duress," having not seen the effects of recovery that other sectors have. Those 13,500 new jobs represent growth of 1.1 percent, but she said growth could be stronger if manufacturing had improved.
"We still have a bunch of sectors, important sectors to us, that are not growing," Deck said. "We still see manufacturing not keeping pace, and when we see a big sector like that not keeping pace it does hold back our overall success."
The job force numbers were disconcerting because they mean more people have stopped looking for work, Deck said.
"The whole story is about the labor force," Deck said. "It tells a dreadful story."
Deck did have good news. Northwest Arkansas' job growth was 4.3 percent, Jonesboro was "on fire" and the Little Rock metro reached its pre-recession level of employment, which Deck called the "positive story of the year."
Pine Bluff continued its long decline and the poor outlook in the state's rural areas helped restrain Arkansas' recovery and immediate prospects for improvement.
"Today I have the good news for northwest Arkansas," Deck said. "I'm a little more worried about Arkansas. Just as much growth we've seen in the metropolitan areas have been more than offset by the rural areas. They haven't seen anything like a recovery from the recession."