In an economic expansion that has generally been lackluster across the state and the nation, the Jonesboro region stands out as one of the more dynamic and growing local economies.
As far back as the “Great Recession” of 2008-09, Jonesboro stood out as a region that seemed almost immune to the national downturn. From 2007 through 2009, United States gross domestic product (GDP) declined by 3.2 percent and Arkansas GDP fell by 2.1 percent. Meanwhile, GDP in the Jonesboro Metropolitan Statistical Area (MSA) — which includes Craighead and Poinsett Counties — managed to show an increase of 3.0 percent. Slow growth afflicted the entire state in 2011 and 2012, but in the resurgent Arkansas economy post 2012, Jonesboro has been one of the most rapidly growing local economies in the state.
The clearest indicator of Jonesboro’s relative strength has been employment growth. From the end of 2009 through December 2016, nonfarm payroll employment growth in the Jonesboro MSA totaled 17.4 percent — an annual rate of 2.3 percent. That growth rate was more than double the 1.0 percent annual rate recorded statewide, and was also well in excess of the 1.6 percent rate recorded nationally. The only Arkansas MSA to experience more rapid employment growth was the Fayetteville-Springdale-Rogers MSA, where growth of 3.3 percent from 2009-2016 began from a recessionary trough that was more than twice as deep as Jonesboro’s (in percentage terms).
Economic conditions vary widely, even among the various regions of Arkansas. Seven years after employment bottomed out in Arkansas, only three metropolitan areas in the state have recovered to the point of having higher employment than before the recession. Metropolitan regions in the northwest and northeast of the state are up over 15 percent from the trough, while central Arkansas is only 2 percent above pre-recession levels. The remaining metros are have employment lingering below previous cyclical peaks.
The health of Jonesboro’s labor market is also evidenced by the area’s unemployment rate. As of the fourth quarter of 2016, Arkansas’ unemployment rate averaged 4.0 percent, significantly lower than the national average of 4.7 percent. At 3.4 percent, Jonesboro’s unemployment rate was, in turn, significantly lower than the statewide average.
The reasons for Jonesboro’s resilience relate primarily to the regional economy’s diversification. As the home of a major state university, employment is partly buffered from cyclical factors. Moreover, the presence of Arkansas State University brings cultural and entertainment opportunities to the community.
Jonesboro also has a very high concentration in health care, with nearly one in four private sector workers employed in the fields of health care and social assistance. With the “baby boom” generation reaching retirement age, health services has been a growth industry for several years — a trend that is expected to continue.
Jonesboro also benefits from serving as a regional retail hub. Over the past three years, taxable sales in Craighead County have grown at an annual rate of over 5 percent compared to only 3.7 percent statewide. The retail sector has also been a driver of employment growth. In 2015 alone, employment in the retail sector increased by 7.7 percent in Craighead county, more than double the growth rate in that sector statewide.
Perhaps the most telling statistic about the health of Jonesboro’s economy is its population growth — an expanding economy with promising job opportunities tends to attract residents. From 2010 to 2015, the population of Craighead County increased by 7.9 percent — the fourth-fastest growing county in the state. Over the same period, Arkansas’ total population expanded by only 1.9 percent and the U.S. population grew by 3.7 percent.
Ongoing economic growth is not without challenges. An increasing population requires additional housing, roadways, public services, schools and other infrastructure. The rapid growth of Jonesboro’s service sector has also meant uneven overall wage and productivity growth.
Although GDP in the Jonesboro metro area has been expanding in recent years, both population and employment have been growing even faster. As a result, the recent trend in output per worker has been declining on net. This factor has also shown through to growth in average weekly wages that falls short of state and national averages.
Over time, transitory growth imbalances are likely to be resolved and infrastructure challenges can be addressed. For much of the rest of the state and the nation, the growth pains of the Jonesboro region might be a source of envy. In a slow-growing economy in which many regions are experiencing contraction rather than expansion, Jonesboro’s prospects appear to remain overwhelmingly upbeat.
See more of the Jonesboro Regional Economic Impact.
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Michael Pakko is chief economist and state economic forecaster with the University of Arkansas at Little Rock’s Institute for Economic Advancement. Copies of the color-coded maps prepared for the Association of Arkansas Development Organizations meeting are available at his blog, ArkansasEconomist.com. |
