Study shows plant closings offset by shale boom

By Amy Widner

LITTLE ROCK — Economic data indicates that the natural-gas industry's presence in White County has had a positive impact in many ways, according to a study by the University of Arkansas at Fayetteville Center for Business and Economic Research.

The center's director, Kathy Deck, said that White County is losing a lotof manufacturing jobs, which is consistent with national trends. However, jobs have increased in the natural gas industry, muting the negative trickledown effects of job loss that would have otherwise accompanied the manufacturing decline.

As a result, Deck said White County has kept the core economic activities upon which growth in areas like construction and the service industry canoccur and has emerged with a "more diversified economic portfolio."

"Has [the natural-gas industry] replaced [manufacturing]? No. Has it enhanced it? Certainly," Deck said. "It's interesting to think about what this economy would look like without the Fayetteville Shale."

Deck presented the study's findings Tuesday at the Searcy Chamber of Commerce. Her presentation isavailable online at cber.uark.edu. It was funded by Chesapeake Energy, one of the major natural gas companies working in the Fayetteville Shale formation that runs through White County. Chesapeake Media Relations Director Mark Raines said the study cost $8,400.

The study focused on data fromJanuary 2002 to the most recent data available on each topic for 2008. The natural gas industry's involvement in White County took off in 2006, a time marker that Deck repeatedly came back to as she explained each graph and the changes the data indicated have occurred since that time.

Between January 2006 and December 2007, the White County manufacturing sector lost 1,062 jobs, a 28.3 percent decrease. During that same time period, 237 jobs were added in the natural resources and mining sector, a 111.8 percent increase. In all sectors, 2,268 jobs have been added since January 2006.

"That's particularly amazing when you consider that was the same period when there was the loss of Maytag to overcome," Deck said.

Because the natural gas jobs kept a core economic base active in White County, jobs could be added in other sectors as well, Deck said. The construction sector added 90 jobs between January 2006 and December 20007, a 7.8 percent increase. The leisure and hospitality sector saw employment increase 29.8 percent between January 2002 and December 2007, beginning in earnest in mid-2004 and increasing dramatically through 2006 and 2007.

Sales-tax collections are another area where the natural gas industry's impact has been most obvious, Deck said. County collections have increased, as well as city collections in Searcy, Beebe, Bald Knob and Rose Bud.

"The economic impact, when you look at it, it shows up with a bang in sales-tax collections," Deck said.

The study also looked at the unemployment rate, numberof businesses, total wages, average weekly wage, average annual pay, total personal income, per capita personal income, property-tax collections and building permits.

Other points that Deck highlighted in her conclusionincluded:

◊Since January 2002, unemployment in White County has averaged 6.2 percent, and as of July 2008, it was down to 5.1 percent, which is similar to the statewide rate for September, 4.9 percent, and below the national rate, 6.1 percent;

◊Almost 300 business establishments have been added in White County since January 2002;

◊Residential construction in Searcy has slowed, which is consistent with the national downturn in the housing sector, but commercial construction showed clear increases throughout 2007 and 2008, despite a national downturn;

◊And in 2007, wage growth was 14 percent - which is better than total wage growth from 2002 to 2006 - average weekly wages in White County surpassed $600 in the fourth quarter of 2007, and the rate of growth of average annual pay doubled for 2007 from itsfive-year average.

The Center for Business and Economic Research has done two statewide studies on the Fayetteville Shale's economic impact on Arkansas, but the White County study was their first county-specific investigation. It was done with public information, and Deck provided county leaders with her sources so that they can update the studies as fresh economic data becomes available.

A group of many natural gas companies funded the statewide studies, and Deck said the center would do other county-specific studies if funding becomes available.

Chesapeake is most active in White County and will likely not fund similar studies in other active Fayetteville Shale counties, like Van Buren or Faulkner counties, Raines said.

- awidner@ arkansasonline.com

Three Rivers, Pages 108, 113 on 10/26/2008