The Little Rock region's economy continues to recover from the COVID-19 pandemic while job growth runs at a slightly slower pace than the national average, Metroplan said in a new report on regional economic trends.
Total regional employment was 365,700 in January, about 1,100 jobs below the pre-pandemic peak in January 2020. The unemployment rate in the region fell to 3.7% in January, matching the rate from January 2020.
The region's available local workforce is smaller by about 2%, or 6,000 potential workers, than it was before the pandemic.
The numbers reflect a national trend.
"Childcare demands have held many women out of the labor force during the crisis," the report says. "Some older workers have retired early, while others — particularly those with health risks —have held out from the job market. Anecdotal evidence speaks of diminished willingness to hold jobs."
The report continues: "Employers need long-term strategies to attract and keep workers on the one hand, or to find autonomous technologies to replace absent workers looking forward."
Metroplan, the region's long-range transportation planning agency, reported that the region had a net loss in warehousing jobs during the pandemic.
But that trend could soon reverse. Amazon has opened new warehouses in Little Rock and North Little Rock, Dollar General is planning a $140 million distribution center in North Little Rock, and the Little Rock Port has received proposals from three developers interested in buying land to house spec warehouse space.
Central Arkansas out-grew the U.S. average from November 2019 to November 2021 in three sectors: financial activities grew by 9%, education/health grew by 3.1% and other services grew by 2.8%.
"The region’s finance sector has been the most reliable provider of job growth over the past decade and correlates with a promising niche in fintech," the report says. "The region’s above-average performance in the financial sector also helps explain its above-average emphasis in the promising cyber-security field."
Inflation and war
Stimulus money helped regional retail sales rise 10.9% in 2021, but a slowdown could happen this year due to the end of those payments and rising inflation.
The report calls inflation the "key wild card for the year ahead."
"Businesses are hiking prices to confront challenges like labor shortage, transportation bottlenecks, and uncertainty about zigzagging demand from the ebbs and flows of pandemic waves," the report says.
Embargoes against Russia over the invasion of Ukraine are expected to have little effect on most economic activity. Higher fuel prices should be the main impact.
But, the report says, "Rising energy prices might be offset by some favorable shifts in local economic sectors due to this war."
The were 3,306 permit issued for housing units in the region in 2021, the fastest growth since 2007.
That figure includes 1,908 single-family housing units and 1,398 multi-family units.
Construction for multi-family units was above the ten-year average, and now accounts for 22% of housing in the region, up from 20% in 2010. The report says the rising share of multi-family units correlates with rising population density and rising home costs.
But costs in the region are still below the national average. Renters and homeowners in the Little Rock metro pay about 75% of what other Americans pay on average.
"The region’s housing affordability advantage could become a significant boost to overall regional growth in a post-Covid-19 economy, in which many modern workers have less need to be located close to job centers in expensive coastal cities," the report says.
About 2,100 people in the region have died from COVID-19, and most deaths happened after the vaccine was available, according to Metroplan.
"The gap in public health education about vaccines has cost lives," the report says. "The correlation between vaccination and lower mortality is beyond dispute."
Pulaski County recorded about 295 deaths per 100,000 people. That's slightly above the U.S. average, but well below the state average of about 374 deaths for 100,000.
The state’s rural counties, with their lower vaccination rates, have suffered death rates about 50% higher than Pulaski County and the U.S. average.
"Between vaccination and viral contagion, a large share of the population now has at least some immunity to Covid-19. Renewed risks from mutant strains cannot be ruled out," the report says. "Vaccination and rapid testing will remain the best tools, and public education the best means for amplifying them."
The region's population grew about 48,000 people from the 2010 census, reaching a population of 748,031.
It also became more diverse. The Black/non-Hispanic population grew by 11%, rising to about 23% of the regional population, while the white/non-Hispanic population decreased by 3.7%, now accounting for 63% of the region.
The fastest growth was among Hispanics, people of two or more races, and Asians, up 57%.
The non-white population grew the fastest in Saline County.