by Lee Hogan
Posted 3/14/2014 11:00 am
Updated 9 months ago
Most economists surveyed expect economic conditions in Arkansas to remain the same in 2014, while a "sizable minority" expect to see some improvement from 2013.
The predictions were released Thursday in the Federal Reserve Bank of St. Louis' "Burgundy Book" report on fourth-quarter 2013 economic conditions.
According to the report, Fayetteville and Fort Smith saw employment growth stronger than the national average, while Little Rock and Texarkana saw weaker growth in the final quarter of 2013.
The Little Rock Zone report, which includes all of the state except northeast Arkansas, showed manufacturing employment fell for the third consecutive year. The drop in 2013 was in part due to a significant drop in manufactured exports, the report said. While Little Rock saw a 0.3 percent drop in manufacturing and Arkansas saw a 0.2 percent drop, Fayetteville saw a 0.6 percent increase.
The zone’s fourth quarter unemployment rate came in at 7.2 percent, up from the 7.0 percent unemployment rate in the U.S. The Fayetteville area enjoyed the lowest unemployment rate at 5.5 percent. Little Rock came in under the national average, as well, at 6.7 percent.
The Jonesboro area — included in the Memphis Zone report that covers northeast Arkansas, west Tennessee and north Mississippi — had the strongest labor market conditions in its zone. The area’s unemployment rate in the fourth quarter averaged at 6.9 percent, under the national average and the Memphis Zone’s 9.4 percent unemployment rate. It was the only area of northeast Arkansas that did not have an unemployment rate over 8 percent in the fourth quarter.
The Little Rock Zone’s residential housing market conditions "softened" in the fourth quarter compared to third quarter numbers. Compared to numbers from a year ago, home prices and single-family building permits were down, the report said.
Fourth quarter numbers also showed a continuing trend of reduced outstanding mortgage debt and credit card balances, and an increase in auto loan debt in the Little Rock Zone. The northeast region of the state also saw a drop in mortgage and credit card debt while auto loan debt increased.
Banks in the Little Rock Zone remained some of the more profitable among all district banks in the fourth quarter with a 1.2 percent return on average assets compared to a 1.0 percent average across the district.
In the Memphis Zone report, northeast Arkansas banks also saw a 1.2 percent return on average assets, while west Tennessee banks saw a 0.7 percent return and north Mississippi banks saw a 0.8 percent return.
The report showed a drop in commodity, soybean and corn prices, and a drop in coal and red meat production in the Little Rock Zone. The northeast Arkansas region also saw a drop in the same areas.
While most expect economic conditions to stay the same in 2014 in the Little Rock Zone, about half of economists surveyed think conditions will improve in 2014 in the Memphis Zone, and only seven percent of those surveyed expect conditions to worsen.
The Little Rock Zone includes about 2.5 million people, while the Memphis Zone includes about 3.1 million.