Arkansas is, for the first time in a while, outpacing the national economy in job growth and unemployment, largely because of improvement in the state's rural areas.
Growth in the first quarter of 2016 was again led by the state's metropolitan areas, particularly the Northwest region, said Kathy Deck, director of the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas. Deck spoke Friday at a quarterly business analysis luncheon in Fayetteville.
While growth in the Northwest and central Arkansas areas has held steady for years, what's pushed the state above national averages recently is improvement in regions that typically struggle -- mainly in Pine Bluff, Fort Smith and rural areas.
"Nonmetro areas have held their own," Deck said. "We've seen growth everywhere."
Rural development has been a main aim of the state's economic development strategy, said Mike Preston, executive director of the Arkansas Economic Development Commission, at a conference in Rogers this week.
"Economic development is different in rural communities," he said. "We're not necessarily looking for the next Google or Facebook to move here."
Preston said the state's strategy focuses on bringing small but steady job announcements to small towns and rural areas.
"I'm a rural guy," he said. "I know the big difference one thing can make."
Arkansas' total employment in April reached an all-time high of about 1.3 million jobs, according to data from the U.S. Bureau of Labor Statistics. The state's unemployment rate fell to a record low of 3.9 percent. The national unemployment rate was 5 percent.
National nonfarm payroll employment increased by 160,000 in April, down from an average of about 200,000 or more jobs in the previous six months.
Workers in metropolitan areas make up about two-thirds of Arkansas' workforce. Arkansas' largest metro area, in the center of the state, saw job growth in April -- an increase of 1.5 percent in total nonfarm employment from the same time last year, according to adjusted Bureau of Labor data.
The strongest region for job growth in the first quarter of 2016 was Northwest Arkansas. The region saw 4.8 percent growth in nonfarm employment in the 12 months ending in April. Fayetteville recently topped U.S. News and World Report's list of affordable places to live in the United States, a success that could soon drive up the cost of living in the area.
"We're in the third year of very high employment growth in Northwest Arkansas," she said. "We need to be prepared to not always be on those best value lists."
The state's worst-performing metro area was Pine Bluff, with an unemployment rate of 5.4 percent in April. That's an improvement from last year's 7.3 percent unemployment rate.
"Right now we are breaking historical patterns," Deck said.
There are some dark spots on the overall sunny outlook. Despite the growth in available jobs, workers aren't getting raises, and home-ownership is still down.
"This is the time everyone should be going to his or her boss," Deck said.
The highest percentage of job growth came in the leisure and hospitality sector, which are mostly restaurant jobs. The sector grew 4.7 percent in a year, according to the U.S. Bureau of Labor Statistics unadjusted numbers. Construction topped job growth nationally.
Marc Fusaro, a professor of economics at Arkansas Tech University, said that to predict future job growth rates and falling unemployment in the state he looks at commercial construction permit data.
"When you have new business construction, they will be hiring people to fill those buildings," he said. "People will move into those cities, the unemployment rate will drop."
He said Pine Bluff saw a 79 percent increase in construction permits this year, followed by a 69 percent increase in Springdale.
He said Arkansas' economy in the first quarter of 2016 slowed from the end of last year, but that's largely because consumers slowed their spending after Christmas shopping.
"That's a seasonal thing you see every year, but the first quarter was a little bit slower than I would have expected," Fusaro said. "So we either had an abnormally strong fourth quarter or a weak first. I'm leaning more towards a strong fourth."
Business on 05/28/2016