Construction employment is continuing to grow, although economists fear it will drop off in 2016, and consumers are putting money saved from low gas prices into savings rather than using it on retail spending.
Those were among the takeaways from a Tuesday morning economic forum held by Arvest Bank in North Little Rock.
Kathy Deck, director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas, and Marc Fusaro, associate professor of economics at Arkansas Tech University, shared analysis and observations about the local and national economy.
According to Deck, home, highway and business construction have been strong in Arkansas. But Fusaro said construction permits have declined drastically in 2015, indicating a sizable drop in construction to come in 2016.
"There has been a slow-down in construction permits, which are a leading indicator for the future," Fusaro said. "I'm worried about 2016 and employment in the industry. Overall, there's a lot of good news, but the construction permits worry me."
Deck said that, overall, U.S. economic growth has not been exciting. She said while gross domestic product has shown slow but steady recovery, income growth has been muted.
She said that without income growth, consumers are less likely to put money back into the economy through retail spending.
Deck said she had also expected to see retail spending more affected by steadily dropping gasoline prices.
"I expected those savings from gasoline purchases to go back into the economy as other purchases," Deck said. "We lost those gas sales and they haven’t gone in as other spending …The good news is that consumers are paying off debt, but we don't get the contemporaneous economic boost."
Deck is the lead researcher for the Arvest Consumer Sentiment Survey, the latest of which was released Tuesday morning. She said the report shows the younger age bracket feeling more positive about the economy, which is a good sign.
"Our reactions to both recessions and expansions are more muted (in Arkansas)," Deck said. "We need people to be feeling confident."
She also said the labor force is growing and unemployment is falling in the state.
According to Fusaro, northwest Arkansas consistently shows the best results in his regular survey, the Arkansas Tech Business Index. The index, designed by Fusaro, examines a city's labor, housing, construction and retail markets to measure growth.
Fusaro said that in central Arkansas, Little Rock is "struggling" while Hot Springs and Conway show better results. He said in Hot Springs, there is a lot of residential construction but little business construction, while Little Rock shows the opposite trend.