Fort Smith gets 2nd data source on area economy

— There are now two quarterly reports tracking economic data in the Fort Smith region.

Earlier this month, the Center for Business Research and Economic Development at the University of Arkansas at Fort Smith released its first Fort Smith Regional Economic Outlook Report, covering the first quarter of this year.

Available by subscription for $200 a year, the report helps fund the center, which opened Jan. 1 in the university’s College of Business. Community sponsors and advertisers, university support and fees from contract research and consulting also help pay for the center. The center also publishes a smaller monthly edition.

The Compass, which is funded and managed by online publication The City Wire, debuted in the first quarter of 2009. The report can be downloaded for free at www.thecitywire.com. Kermit Kuehn, director of the UAFS center, said The Compass and the Regional Economic Report are efforts to give community leaders information in the most useable form to draw on when they talk to people or companies outside the region.

“The Fort Smith Regional Chamber of Commerce and other entities here are working on a unified approach to economic development, and each contributes their piece to the picture of who we are,” he said.

Rusty Myers, director of economic development for the nonprofit Western Arkansas Planning & Development District Inc. in Fort Smith, saidhe’s delighted to see two such reports on the region.

“People are being better informed,” Myers said, “which leads to better policy decisions by local governments and other institutions, because they have better information to base the decisions on.”

Fort Smith, the state’s second-largest city, for decades relied largely on manufacturing to drive its economy.

“It was pretty much a factory town,” Myers said.

Between 2005 and 2009, the Fort Smith metropolitan area lost 7,000 manufacturing jobs as companies such as Whirlpool Corp., Trane Inc. and Rheem have trimmed staff.But other employers moving into the area are creating new jobs. Mostly located in Chaffee Crossing, one of the sponsors of the UAFS report, these large, high-tech plants include Mars PetCare US, soon-to-open Umarex USA, which makes airguns, and the planned Mitsubishi wind-turbine assembly plant.

WHY NOW

Michael Tilley, editor of The City Wire, said that in his previous job as business editor at the Southwest Times-Record, he was struck by the fact that the Little Rock and Northwest Arkansas areas had economic analysis reports, but the Fort Smith region had none. So when he started his company, TCW Media, that was something he wanted to remedy.

“Before we launched [The Compass], we started asking around, talking to bankers, Realtors and other business people,” Tilley said. “The main response was, ‘Gosh, I hope you will, I’m tired of not having access to a comprehensive report.’ They were having to pull numbers like employment or sales-tax data themselves.”

Tilley said he doesn’t see UAFS’ report as competition, but rather as an addition to the body of available information.

“Are we proud we were out there first and are 100 percent independent? You bet, but we’re glad the region finallyhas some good information about where the economy is and where it’s going.”

Kuehn said the Regional Outlook Report was developed in part because economic development is a priority for the university, and the report was one way to fulfill that goal.

According to the center’s website, the information in the report is intended to help community leaders in making business decisions, assessing community strengths and weaknesses, evaluating innovation and entrepreneurial activity, weighing development options and crafting effective policy.

“It’s great to have multiple voices on the data,” Kuehn said. “Data doesn’t speak for itself, you have to have someone speak for it. And people look at data in different ways.”

WHAT THEY OFFER

Both reports cover the Fort Smith Metropolitan Statistical Area, which is made up of Sebastian, Crawford and Franklin counties in Arkansas and Le Flore and Sequoyah counties in Oklahoma.

The Compass features data collected and analyzed by economist Jeff Collins, cofounder of Springdale-based Streetsmart Data Services. Collins was previously the director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville.

The report covers both current economic indicators, such as unemployment rates and sales tax collections, and leading indicators, which include building permit valuations and employment figures by sector.

Each indicator gets a letter grade reflecting the degree of change over the covered period. For instance, a grade of C indicates no change, while an A or B indicates improvement over the historical average and D or F signals a decline.

The report also gives the region an overall economic grade for each quarter.

UAFS’ report has three sections: economic data, consumer sentiment and a section Kuehn said “will always take a theme or topic of interest that hopefully will provoke discussions about its implications for the future of our community.”

The inaugural report’s third section explores the region’s employment trends and prospects.

The consumer sentiment portion is based on the University of Michigan’s national Index of Consumer Sentiment, and is used to gauge consumers’ level of confidence on aspects of the economy. Of the 3,000 surveys mailed in the Fort Smith statistical area, 435 were returned in time for analysis.

Conducting the survey was pricey, mainly because of postage, but worth it since the results provide insight into consumer attitudes and buying intentions, Kuehn said.

“We feel it’s a good, unique piece of information you can’t get anywhere else or off a database,” he said. “Of course, it will become more valuable over time as we get more data to compare to.”

WHAT THEY SAY

The reports paint a similar picture for the first quarter of 2010.

The first-quarter 2010 edition of The Compass, released in late May, gave the region’s economy a C-minus, unchanged from the previous quarter but a slight improvement from the first quarter of 2009.

Collins wrote that even though nonfarm employment declined year-over-year, improvement in tax collections and construction activity are encouraging signs.

“I expect second-quarter data will affirm that the economy is recovering, and provide evidence of the rate of recovery that may be expected in the future,” he wrote.

In the UAFS report, Kuehn made a similar observation about the economic indicators, writing that “the factors important for a recovery are moving in the right direction.”

However, he was more guarded about the near future, mainly based on the employment data.

“Until the economy solidifies expansion, and employment prospects improve, wecan expect short-term performance of our economy to be unstable,” Kuehn wrote.

The consumer sentiment section shows Fort Smith-area respondents are more optimistic about the region’s economy over the next five years than they are about the national economy.

Collins observed that the loss of manufacturing jobs in recent years is, in fact, a positive development, because it helps diversify the economy. As that occurs, he wrote, “The risk of a downturn in any one sector causing a catastrophic loss of employment diminishes.”

Business, Pages 73 on 06/27/2010

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