LOWELL -- Northwest Arkansans are creating jobs and businesses at a healthy clip and are more educated than in recent years, according to a University of Arkansas report released Tuesday.
The latest State of the Northwest Arkansas Region report from the university's Center for Business and Economic Research in Fayetteville found several strengths and some persistent weaknesses in the area's economy, interim director Mervin Jebaraj told a crowd of more than 200 business representatives and public officials.
At a glance
State of the Northwest Arkansas Region
The University of Arkansas’ annual report compares Northwest Arkansas to other economically vibrant metropolitan areas:
• Austin-Round Rock, Texas
• Des Moines-West Des Moines, Iowa
• Durham-Chapel Hill, N.C.
• Madison, Wis.
• Raleigh, N.C.
To find the full State of the Northwest Arkansas Region report, click here.
Source: University of Arkansas Center for Business and Economic Research
Some of the highlights: The region's growth in jobs in recent years surpassed that of several of its peer metropolitan areas around the country and reached an even faster yearly pace of 4 percent last year in almost every industry, beating Austin, Texas. Northwest Arkansas also launched 2.7 percent more businesses last year than the year before. The pace was about the same as the year before but still marks a significant increase in the past five years, the report shows.
The report uses census and market data to compare Northwest Arkansas to its past and to Madison, Wis., Austin and three other cities that do as well or better than this area on several measures and therefore can be models to emulate.
Large pillar companies still dominate Northwest Arkansas, and Jebaraj said that's not necessarily bad -- it's hard to argue Wal-Mart has held back the region, for example. But he said the bulk of new jobs in an economy come from the newest, smallest and scrappiest companies.
He praised organizations such as Grit Studios in Bentonville and Startup Junkie Consulting in Fayetteville that help would-be entrepreneurs turn their ideas into businesses, often at no charge. The University of Arkansas runs a similar Small Business & Technology Development Center and last week opened an entrepreneurship hub near the Fayetteville square for students and faculty.
"All of that needs to continue," Jebaraj said. "We need to feed this pipeline some more."
The proportion of adults with bachelor's degrees jumped from about 28 percent in 2012 and 2014 to 31 percent last year, a difference of several thousand people. That figure's below every peer in the report but above the state's average and just 0.3 percent away from the national average.
The report isn't all so rosy, finding relatively low labor force participation compared to the other cities, for instance. Around 77 percent of people age 20 to 64 are working or seeking work in Northwest Arkansas, lower than every peer and the same as the national average. Northwest Arkansas mothers of children 6 and younger are much less likely to work, with participation rates in the 60s, compared to 83.5 percent in Madison.
Jebaraj said the difference stems at least partly from a dearth of affordable early childhood care and education.
A 2016 study from the economic research center and the Helen R. Walton Children's Enrichment Center in Bentonville found thousands of unfilled early childhood care and education spots in Benton and Washington counties, suggesting they're too pricey or aren't high enough in quality for many families. The study also projected demand would outstrip supply in the coming years even with today's open spots.
The enrichment center has waiting lists for every age group, with families often waiting three or four years before getting enrolled, said Sunny Lane, director of development. It's been that way since at least 2002, when she put her own son on the list.
"And that's not uncommon in our area if it's a high quality program," Lane added.
The center charges about $200 a week per child and offers scholarships for up to half of that based on families' incomes. Nearly all of the families have single parents or two parents who work, Lane said.
The center is breaking ground in two weeks on a new school aimed at adults who want to run or teach at early childcare centers. It already works with about 2,500 adults each year to help them get accredited by the state and hopes to double that number and help ease the childcare shortage, Lane said.
Otherwise, she said, the center is urging the region and state to help families afford the care and support caregivers to cushion parents from the full cost.
The university report Tuesday also included a seeming paradox in homeownership numbers. The median home cost about 15 percent of its owner's income in Northwest Arkansas last year, down about 2 percent from 2012 and lower than every peer and the national average. But the proportion of people who live in a home they own continues to fall. It tumbled here from 65 percent a decade ago to 59 percent last year, according to census estimates.
The drop is a longstanding and nationwide trend, Jebaraj said. The National Association of Home Builders and other groups have pointed to student debt, stricter rules on lending and builders' focus on constructing bigger and more expensive homes as possible reasons. The rising price of homes in Northwest Arkansas lends some support to the builder-priority idea.
Jebaraj also said low-cost migrant construction crews stopped coming into the country in the recession and haven't returned. Returning to the relative free-for-all in home loans that fed the recession isn't the way to go, but home sales are important to the local economy, he added.
Jan Holland, a Realtor with NWA Realty Group, said recently she's seen more of the bigger homes meant for someone upgrading, not first-time buyers, and more duplexes, which are usually rented. The entry homes in the middle are still around, though.
"We're still in a stable market in this area for home sales all across the board as far as pricing," she said. "It's just a funny market."
NW News on 10/04/2017
Print Headline: Report: NWA economy strong on jobs