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Kathy Deck: 2015 To Be A Transformative Year for Arkansas Economy

3 min read

Arkansas’ economy is clawing back to its pre-recession level, and Kathy Deck believes 2015 will be a year of transition.

Deck, director of the Center for Business and Economic Research at the University of Arkansas, gave the state forecast at the 21st annual Business Forecast Luncheon on Friday at the Hammons Convention Center in Rogers. 

Deck said Arkansas’ employment growth has lagged the nation’s rate, but she predicts the state will hit its previous employment highs by the end of the year.

“Here in Arkansas we’re still just shy of our previous employment highs,” Deck said.

John James, founder Acumen Brands of Fayetteville, was the moderator at the event, which had an attendance of about 1,000 business and government leaders. Carl Tannenbaum, chief economist of Northern Trust, gave an international economy overview, and John Silvia, managing director of Wells Fargo, gave a national overview.

James stepped down as Acumen Brands CEO this past year to start a $100 million entrepreneur fund, which he said has already received about one-third of his goal. James said Acumen, with its Country Outfitter brand, upset national retailers, and current business can either be “disruptive or disrupted” by new innovation.

Deck said Arkansas has seen strength in certain regions such as Jonesboro and northwest Arkansas. Jonesboro’s job growth continues to be “great success story” outside of northwest Arkansas, while central Arkansas has seen modest growth.

In northwest Arkansas, unemployment is 3.9 percent, a low rate tempered by a drop in the overall labor force. Northwest Arkansas’ largest job market is in the trade-transportation-utilities sector, which makes up 22 percent of the region but lost 1,600 jobs in 2014.

But Deck thinks those numbers may improve as new data comes in.

“When your biggest job sector is negative, it’s a challenge to get substantial job growth,” Deck said. “Many of our largest employers spent the last year in some sort of restructuring. The kindest interpretation in northwest Arkansas is that those jobs losses are setting the stage for future growth. They are the necessary trimming of that has to take place.”

Deck said workforce is an overriding concern of educational institutions and employers. Deck said when she tours the state and speaks with business leaders, she hears the same complaint — they can’t find workers with the required skills.

Deck said one solution is to pay workers more. But she acknowledged that there needs to be a meeting of the two camps to improve workers’ skills and their pay.

Deck said Arkansas still lags the national average in per capita income but is making progress.

“It’s the match between our industrial mix and our workforce,” Deck said. “That’s the pure and simple. They’re codependent of course.”

Construction has picked back up — “It’s on fire,” Deck said — but attention must be paid to demand so overbuilding doesn’t lead to a glut of supply.

“We do see increased activity across the state in all those kinds of construction,” said Deck, referring to single-family, multifamily and commercial construction. “Construction will continue to be brisk. There will be orange barrels and cones everywhere.”

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