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Report: Conway economy ‘stagnant’ for 2013Published March 21, 2014 at 2:20 p.m.
CONWAY — Roger Lewis didn’t mince words about the results of the Faulkner County Annual Economic Report for 2013.
“The economy in Conway last year was kind of in a funk,” Lewis said. “It was stagnant. The sales-tax growth was very minimal.”
This is the 20th year that Lewis has given his report to the Conway Rotary Club.
Lewis, who retired in 2002 as director of institutional research at the University of Central Arkansas, gives the report a theme each year. This one was Imagine Conway 2020.
In not-so-rosy information about 2013, he said unemployment in Conway rose over the past several months and, at 7.2 percent, was almost equal to the state’s at 7.4 percent.
As of December 2013, he said unemployment was 7 percent in Faulkner County, compared with 6.7 nationally.
“That’s the main thing,” he said.
He attributed the high unemployment to the end-of-the-year layoffs of 500 at Hewlett-Packard, a layoff at Acxiom Corp. and a slowdown in the natural-gas industry.
“The natural-gas industry cut back on drilling wells, that’s where the labor is intensive — service industries like Schlumberger,” he said.
“It’s just kind of a hard time at the end of the year, with all the layoffs. HP is hiring back some,” he said.
The one-percent sales tax that goes into Conway’s general fund generated $12.9 million in 2013, compared to $12.8 million in 2012.
For the county, a half-percent sales tax generated $8.1 million in 2013, down from $8.5 million in 2012.
“The county was down; the city was level,” he said.
“That’s mainly due to out around Greenbrier and areas out there, that natural-gas drilling is down, and lot of money is derived from that activity out there, people buying things and also the royalties were down and not as much money there,” Lewis said.
“They buy a lot of gravel … and other support services for the drilling,” he said.
One of the most hard-hit areas in 2013 was home construction. “Home construction is way down,” Lewis said.
“If you put single-family units, duplexes and apartments together, there were 251 family units” permitted in 2013, he said. “That’s pretty low.”
Lewis said 147 permits were issued for single-family homes.
“That’s the lowest since I’ve been counting them,” Lewis said. “The homes that have been built have been larger and more expensive than average. First-time homebuilders just can’t qualify because of changing regulations; because of the housing crisis they’ve tightened up the income requirements.
“A lot of young couples have a lot of student debt, and the entry-level homes just haven’t been built. The ones that have are more custom-made homes,” he said.
Developer Hal Crafton agreed that construction of single-family homes, especially starter homes, has stalled.
“I’ve got my opinions, and it’s not any one thing. It’s the economy, obviously. The existing home market is soft, and a lot of people can’t sell their home to move on again,” Crafton said.
“Another thing I see is we’ve become an expensive place to develop and build, so we’re not as diversified in our development,” he said.
Crafton said that in past years, he liked to develop a starter-home subdivision and a “move-up” subdivision, plus higher-end homes.
“With the price of land and cost of infrastructure, we’ve left everything but almost the upper end to do,” Crafton said.
In addition, Crafton said he believes some employees with the oil-and-gas industry are leaving, and that Conway just isn’t growing as fast as it has been.
Crafton said he doesn’t believe that will change in 2014.
He said two single-family home permits were issued in January and four in February.
Lewis said he’s been saying for five years that Conway is saturated with apartments, but a few are still being built.
In 2013, he said permits were issued for 92 multifamily apartments units. “It’s simmered down. That’s kind of low; some years it’s real high. The fact that a young couple cannot buy a home, that means an apartment,” he said.
Crafton said apartment building is cyclical.
“You’ll have a big apartment complex or two built, and go two or three years and not build any,” he said. “The apartment market in Conway the next few years will be softer, I think.”
Lewis said another aspect of the Faulkner County economy that has been “real soft for several years” is hotel receipts.
“They have not grown at all. It’s just been flat. It’s changed a little bit,” Lewis said.
The receipts for 2013 were $18.6 million; in 2012 they were $18.7 million.
Lewis attributed the lack of growth in hotel receipts to the decline in the gas industry and people traveling less in a down economy.
People still eat out, though, based on restaurant sales.
In 2013, sales, based on the Advertising and Promotion tax, were $165 million, up from $161.4 million in 2012, Lewis said.
The top 10 restaurants in annual sales, not including alcohol, are:
Chick-fil-A, $4.5 million;
Chili’s, $3.9 million;
Golden Corral, $3.82 million;
Cracker Barrel, $3.77 million;
McDonald’s on Salem Road in Conway, $3.4 million;
TGI Friday’s — $3.3 million;
McDonald’s on Dave Ward, $3.1 million;
McDonald’s on Oak Street, 2.9 million;
McDonald’s on U.S. 65, $2.87 million and
Stoby’s, $2.5 million, which is new in the top 10.
Lewis said the sales also include pattiCakes, a bakery that belongs to Stoby’s owners David and Patti Stobaugh.
“I actually had Aramark No. 10 — they’re really not a restaurant,” Lewis said. Aramark is the food-service provider at the University of Central Arkansas.
“When I took them out, Stoby’s was No. 10. Stoby’s has done well. It’s owned by the original owners, started in 1980.
“It’s amazing; I think it’s tradition,” he said. “When my daughter comes back from Georgia to visit every year and I said, ‘Where you want to go?’ It’s Stoby’s. Going to college here, they go to Stoby’s.”
Only two of the top 10 restaurants sell liquor, he pointed out.
People who have been in Conway during rush hour probably won’t be surprised at another figure Lewis reported: The number of vehicles registered to Faulkner County is 97,000, up 4,700 over 2012.
“That’s any motorized vehicles — motorcycles, trucks and buses and cars,” he said.
The Arkansas Department of Motor Vehicles has a new software program, Lewis said, so he’s not sure if the numbers are up that much, or the reporting is just better.
“I think that’s a little bit of an anomaly,” he said. “They claim it’s more accurate.”
Usually, the number of vehicles is up 2,000 a year.
It wasn’t all doom and gloom.
“Last year, the city and the county received money from the gas severance tax, and that’s up considerably, $267,000 for the city for the year from the severance-tax distribution. The county received $224,000,” Lewis said. “Both are up 70 percent over the year before. Natural-gas prices were so depressed in 2012. If you go back to 2011, it’s up, but not nearly as much. It really dropped in 2012.”
The city and county used the money for transportation, he said, specifically roads.
Lewis expects his next economic report to be more positive.
“The future is bright,” he said.
“Natural-gas prices are holding up — nationally, the reserves are down, and it’ll (prices) be up,” he said.
“Here’s the other thing
why it’s going to be bright — constructionwise, we’re going to have Central Landing, the new shopping area; it’s going to be completed around 2016. Construction will start on Lewis Crossing, where the old sale barn was — unfortunately it’s not mine — and the Markham Street rehab will start,” he said.
In addition, Baptist Health Medical Center-Conway is expected to open in 2016 on property west of Interstate 40 near Exit 129.
Lewis said the UCA College of Business always supports his economic report by providing a graduate student each year. Papy Lucien of the Democratic Republic of Congo helped this year. Also, Amber Hall, director of institutional research, “helped a lot coordinating this.”
The late Thomas Wilson, CEO of what was then First State Bank, compiled the first economic report in 1952.
The inaugural presentation was given first to the Conway Rotary Club, a tradition that has continued, Lewis said.
Senior writer Tammy Keith can be reached at (501) 327-0370 or email@example.com.
Niche Publications Senior Writer Tammy Keith can be reached at 501-327-0370 or firstname.lastname@example.org.