Northwest only state area to report jobs grew

Trend tightens housing market

Students and exhibitors meet on Thursday, March 3, 2022, at an all-majors career fair inside the Reynolds Room of the Smith-Pendergraft Campus Center at the University of Arkansas-Fort Smith in Fort Smith. (NWA Democrat-Gazette/Hank Layton)
Students and exhibitors meet on Thursday, March 3, 2022, at an all-majors career fair inside the Reynolds Room of the Smith-Pendergraft Campus Center at the University of Arkansas-Fort Smith in Fort Smith. (NWA Democrat-Gazette/Hank Layton)


FAYETTEVILLE -- Northwest Arkansas accounts for all of the state's net job growth over the past two years, according to figures presented at Friday's quarterly business analysis luncheon presented by the University of Arkansas Center for Business and Economic Research.

Job losses offset job gains throughout the rest of the state, according to figures shown by center Director Mervin Jebaraj. The state added 15,000 jobs in the last two years -- about half the job growth rate compared to pre-pandemic years, he said. The figure almost exactly matches this region's job growth over the same period, he said.

"Arkansas finally has more employment than before the pandemic, but almost all the jobs added are in Northwest Arkansas," in Benton and Washington counties, Jebaraj said in remarks to an audience of at least 160.

More workers means home sales are expected to remain strong despite rising mortgage interest rates, Jebaraj said. Lumber prices have stabilized after an extremely volatile two years that bedeviled housing constructions.

Still, supply chain issues are holding back home construction in the region.

"People are willing to buy here, but not a house without appliances installed," he said.

A completed house will sell almost immediately, he said. The amount of unoccupied, new construction is functionally zero, he said. Demand for living space is also eating up any available rental property.

Byron Galloway of Springdale, a private banking adviser for Arvest Bank, said Jebaraj's findings were consistent with what he is seeing in the business world. Still, it was encouraging to see Jebaraj's research on the topic, especially his belief a recession is not looming yet, Galloway said.

Monique Pierre of Fayetteville, who is chief executive for the real estate developers Partners for Better Housing, said they also see the trends and conditions Jebaraj describes, but that these presentations give detailed explanations of those conditions.

"This makes us more nimble in our decision making," she said.

Northwest Arkansas deals with the same inflation and supply chain issues as the rest of the world, but do not expect a recession yet, Jebaraj advised.

"Consumer spending and business investment in the first quarter were up," he said.

The biggest reason overall indicators appear down is because government spending is down, he said. A contributing factor is a drop in exports because so many U.S. trading partners are not recovering from the covid pandemic slump as well as the United States is.

"We are outperforming everyone else," he said.

Consumer spending is so far up it's actually exceeding spending during the last Christmas shopping season, Jebaraj said. Pierre asked Jebaraj after his remarks if credit card debt was rising from the spending. No, Jebaraj said. Consumers have cash because they had little to spend their money on during the shutdowns related to the pandemic.

The war started by Russia's invasion of Ukraine affects energy supplies in the rest of the world worse than in the United States, Jebaraj said.

Food prices worldwide are rising faster than here, exacerbated by Russia's blockade of Ukraine's food exports. Ukraine not only accounted for 9% of world wheat exports before the war, but is a major source of cooking oil, according to news reports. Sunflower oil from Ukraine made up 42% of worldwide global exports of that commodity in 2019, according to United Nations figures, and accounted for 76% of India's supply of that oil.

Another factor which constrains food supplies in the United States is the drop in immigration rates, Jebaraj said. Produce is not getting picked in the field and meat processing is suffering from a lack of workers, he said.

Similarly, there is no quick fix to tight fuel supplies and rising fuel prices, Jebaraj said. OPEC faces serious labor shortages that are holding back production worldwide. In the United States, oil companies "lost their shirts in 2020" by expanding production and then seeing the pandemic hit, he said. Those companies are in no hurry to ramp up production again, he said. Rather, they seek to recoup the financial losses they suffered when demand collapsed during the pandemic.


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