Arkansas' Manufacturing Sector Takes Baby Steps Back in 2013

Arkansas' Manufacturing Sector Takes Baby Steps Back in 2013
Kathy Deck

The manufacturing sector took the tiniest of steps back in 2013.

Kathy Deck, the director of the Center for Business & Economic Research at the University of Arkansas, said the state reported 155,100 manufacturing jobs in December 2013, according to the Bureau of Labor Statistics. The drop of 300 jobs from the 155,400 reported in December 2012 is a decrease of about 0.2 percent.

Nationwide, Deck said, manufacturing gained about 89,000 jobs, an increase of less than 1 percent. Deck said the figures are in line with the economy, which is still trying to fully commit to recovery.

The year 2012 saw much better improvements in manufacturing jobs and exports, Deck said, but this past year saw that momentum stagnate a bit. Manufacturing is important in Arkansas, where about 13 percent of the workforce — about 150 percent of the national average — is employed.

“Those are relatively modest changes,” Deck said. “You can’t read too much into it. We have a wide mix of things that we make. We don’t make one kind of thing. Diverse economies are much more resilient.”

The List

The list of the top manufacturers in the state by number of employees looks a lot like last year’s list. Tyson Foods is head and shoulders above the rest of the state’s employers with 23,300 workers and reported no change.

Get the List: Click here to access the list of the state's largest manufacturers.

No. 3 Georgia-Pacific reported a loss of 200 jobs, mostly from the fallout of a plywood plant closing two years ago. No. 11 Pilgrim’s Pride cut 400 jobs when it closed its facility in Batesville, but Ozark Mountain Poultry of Rogers picked up some of the slack when it bought the facility and hired 250 workers.

Deck said the stagnation in Arkansas was mostly across the board, from transportation equipment to agricultural products, with increases in plastic, rubber and fabricated metals. According to the U.S. Department of Commerce, Arkansas exports dropped from $7.6 billion to $7.1 billion from 2012 to 2013, a decrease of 6 percent.

“2013 was slightly less good across industries than 2012 and that included everything,” Deck said. “It tells me a couple of things. The recovery in the rest of the world hit a little bit of a bump. It was across so many different products.”

Randy Zook, the president and CEO of the Arkansas State Chamber of Commerce, said the stagnation in job growth is partially because companies are reluctant to invest in their businesses until officials have a better idea of the economy’s direction. Zook said most corporations have plenty of cash on hand for expansion or investment, but the recent recession is causing a wait-and-see approach.

“Manufacturing as a whole is slowly, slowly, slowly regaining its momentum as the recovery unfolds,” Zook said. “There’s not enough demand for products and services, and the consumer is reluctant to spend. The recovery has yet to find its pace. There was a hard lesson in the last recession. Guys who had cash weathered the storm.”

Deck said there is hope for the near future. She said the purchasing managers index shows that manufacturing is likely to expand during the next six months.

“We don’t see real strong numbers, but we see modest expectations the next six months are going to be OK,” Deck said. “Manufacturing really does lead the rest of the economy. It is the bellwether. When you have 13 percent of your employment, it certainly leads in Arkansas.”