by Mark Carter
Posted 6/24/2014 09:07 am
Updated 6 months ago
The economic outlook for most of Arkansas improved modestly over the second quarter of 2014, according to the latest Burgundy Book report released Tuesday from the Federal Reserve Bank of St. Louis.
The Burgundy Book reports comprehensive data on economic conditions in each of the St. Louis Fed's four zones: Little Rock, Louisville, Memphis and St. Louis. The Little Rock zone comprises most of the state with the exception of northeast Arkansas which is included in the Memphis zone.
The quarterly report includes the following sections: labor markets, manufacturing, real estate and construction, the household sector, banking and finance, and agriculture and natural resources.
According to a May survey of business leaders in the state, the near-term outlook for the Little Rock zone improved slightly. Roughly two-thirds of those surveyed expect economic conditions in 2014 to be better or somewhat better than they were in 2013, the report said.
Highlights from the report:
- The Little Rock zone’s unemployment rate averaged 6.8 percent in the first quarter of 2014, down modestly from the previous quarter (7.2 percent). Two of the four MSAs in the Little Rock zone (Fayetteville and Little Rock) had unemployment rates below the U.S. average (6.7 percent). The zone’s payroll employment growth was modestly positive in the first quarter.
- In contrast to the nation, manufacturing employment in the Little Rock zone declined in the first quarter. However, activity in the transportation sector appears to be ramping up, as reflected in a sizable increase in job openings over the past several months.
- Compared with a year earlier, home prices and single-family building permits declined in the first quarter — although Fayetteville and Texarkana were notable exceptions. Vacancy rates in Little Rock were unchanged to slightly lower in the first quarter compared with the previous quarter.
- Households in the Little Rock zone continue to pare their mortgage debt and credit card balances. However, auto loan debt — a proxy for auto sales — increased at a healthy pace in the first quarter and by a larger percentage than seen nationally.
- Compared with the previous three months, Arkansas banks’ return on assets and net interest margins increased slightly in the first quarter; however, their nonperforming loan ratio was largely unchanged.
- Arkansas farmers reduced their corn acreage in 2014, but boosted their rice acreage sharply.