Chief Economist and Economic Forecaster
University of Arkansas at Little Rock Institute for Economic Advancement
I will watch with interest as the “new normal” for our economy unfolds. The eventual availability of vaccines will make it possible to return to a life where COVID-19 is no longer a central focus. Still, in the months remaining, we will continue to experience accelerated creative destruction that’s likely to alter the economic landscape permanently.
By the end of 2020, the economy has recovered more quickly than many expected, but emerging growth patterns reflect changes. Consumers have altered their spending: At-home meals have displaced dining out, online shopping continues to displace brick-and-mortar retail, and travel is increasingly local.
Businesses, particularly restaurants and the retail sector, have accommodated social distancing and consumer expectations with resilience and flexibility. Trends toward remote work and video teleconferencing have accelerated, transforming the office environment.
Although some changes may prove temporary, others will persist. In the end, I expect to see a post-pandemic economy that’s more resilient and dynamic.
At Southern Bancorp, we are cautiously optimistic about 2021. Unfortunately, the pandemic will continue to impact how we do business. Protecting our customers and team members will remain our priority, so we will continue to operate primarily through our drive-through lanes and in person by appointment only with masks required.
Even pre-COVID, many of the markets we serve as a Community Development Financial Institutions bank were economically challenged, and they need stimulus support to rebuild. Therefore, we hope that Congress will approve additional unemployment benefits and direct support to small businesses.
From a margin and mission perspective, 2020 was a good year for Southern, so we are poised to continue to grow and expand our footprint and impact. We look forward to expanding into the Little Rock market with a full-service bank branch, offering our unique brand of products and services that focus on serving communities often overlooked by traditional financial service providers.
President & CEO
Arkansas Children’s Inc.
Among the lessons 2020 has confirmed for me is that I have no business trying to predict the unpredictable. This has been a humbling takeaway for all of us, but it’s also a reminder that resolve and resiliency help drive us forward as we face the unknown.
While I’m reluctant to predict anything after the past year, I do believe 2021 will further challenge all of us to keep our commitment to each other. There is no question Arkansans will have to challenge their neighbors and colleagues to remain vigilant, persist with data-proven precautions and offer abundant compassion.
These steps are the only ways our collective health recovers and our economy begins to rebound. Will they be easy? Not at all. Will they be worth it? For an Arkansas where children grow up with a healthier tomorrow, absolutely.
Little Rock School District
My top prediction for 2021 is that the Little Rock School District will meet the exit plan criteria established by the state Department of Education as full local control returns.
This significant result comes as a result of tremendous effort by LRSD staff, students, parents and community. Meeting the exit criteria happens if we have systemic instructional practices and support school deliveries throughout the district. We must show that we are implementing the science of reading, that we are being collaborative across all aspects of the district, that we have systems in place to monitor, adjust and track progress, and that we are sound in our fiscal management.
My other big prediction is that we will have a return of students who did not show up to start our 2020-21 school year. LRSD, like many school districts in the state, saw a decrease in enrollment at the pre-K and K-5 levels. As COVID vaccination reaches Little Rock, it will help parents have confidence to return their children to school. They need us and we need them. Our future as a community depends on educating our young people.
President and CEO
Arkansas State Chamber of Commerce and Associated Industries of Arkansas
As I’m writing this, trucks are rolling to deliver Pfizer’s vaccine to millions of Americans. This is the game-changer.
There is enormous pent-up demand in nearly every aspect of the economy. That demand will soon begin to manifest itself as people’s confidence overcomes their fear of COVID-19. Restaurants, hotels, airlines, meeting facilities, offices, schools, auto dealers, appliances, homebuilding, clothing and many other businesses that have been slam-dunked by the virus will begin to see daily improvement in activity and sales.
A really good economic forecaster on Wall Street is predicting 6% year-over-year growth in GDP for 2021. That would be the biggest increase since 1984. As that develops, hiring will follow. We still have nearly 12 million fewer people working than just before the virus exploded. That’s a lot of buying power.
We have been blessed in Arkansas as our governor has allowed most businesses to keep operating. Our agricultural sector has had a good year. Our momentum will increase as the vaccine becomes widely distributed. It promises to be a year of resurgence and growth. Thank you, pharmaceutical companies.
Arkansas Hospitality Association
Every hour in America, 400 hotel jobs are lost, as Congress does nothing. According to the American Hotel & Lodging Association, 71% of hotels will not survive another six months without major government relief.
The hotel industry was the first impacted by the pandemic and will be the last to recover. Zoom is here to stay. Conventions and large group venues will be very slow to come back, and large meeting spaces will have to get creative.
Face masks will remain. Plexiglass barriers will be everywhere. COVID-19 testing will be offered during your travel experiences. There will be contactless options for many services.
Restaurants will be smaller, have more automated kitchen equipment, and the typical layout may change. Delivery, pickup, subscription services and grab-and-go at retail locations will increase.
Half of baby boomers will use takeout and delivery more often. Before COVID, delivery was 1 in 20 orders. Today, it is 1 in 5. But any rise in gas prices will crowd out restaurant spending.
The number of workers 65 and older will reach a new high and the number of teen workers will fall to a 65-year low. Women and minorities will hold a larger proportion of upper management jobs.
Competition for workers will remain intense, despite fewer job openings.
CEO, Partner & Executive Broker
Kelley Commercial Partners
We work throughout the state in many property categories — unimproved land, build-to-suit, retail, office, industrial, hotels, multifamily. Prior to March, we were spending more time on retail and office requirements. Today we are working with a variety of industrial and distribution needs as well as acquisitions by users and investors. We believe industrial properties will be active over the next several years to answer the needs of online distribution and manufacturing.
We see some retail space making a transition to more service and medical uses. Owners of retail properties that are able and willing to make that conversion will benefit by diversifying their tenant mix. COVID and the growth in online shopping have caused owners of retail properties to convert empty spaces to uses not directly affected by online shopping. COVID accelerated the transition, and that will continue.
Office space users are weighing their future needs. Some are looking for more traditional office plans providing an emphasis on safety; some are planning to make remote work permanent.
We believe our market will benefit as companies look for communities that offer affordable living costs and more space to operate their businesses.