Kathy Deck said northwest Arkansas and health care services will be strong points for an otherwise less robust Arkansas job market in 2017.
Deck, the director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville, made her remarks Friday at the 23rd annual Business Forecast Luncheon at the Hammons Center in Rogers. A year ago, Deck used "Cruising Altitude" as a metaphor for her Arkansas presentation; this year's outlook was less rosy.
"I now see us as more circling and trying to avoid the turbulence," Deck said. "Not exactly coming in for a landing but not an ascent either. That does mean we expect to see somewhat of a slowed pace into the rest of the year."
Deck said non-farm employment grew just 0.2 percent in Arkansas and by 0.7 percent in northwest Arkansas. Northwest Arkansas' job market is dominated by the trade, transportation and utilities industry and the professional and business services industry, which combine to account for 44 percent of the area’s jobs.
That should change in 2017. Northwest Arkansas is in the midst of a health care boom with multimillion-dollar construction projects by Mercy Northwest Hospital, Arkansas Children's Hospital and Washington Regional Medical Center.
Deck predicts an addition of 1,000 health care jobs as a result of the investments. Overall, she projects 4,400 jobs to be added in the region in 2017.
Despite northwest Arkansas' strong projection — even as Deck admitted that 4,400 jobs was a decrease from previous years — the state of Arkansas was only expected to add 4,800 jobs. That's 400 jobs overall even with a red-hot Jonesboro market and a relatively stable central Arkansas.
"I'm afraid we find ourselves very similarly oriented to where we were about 10 years ago where the non-metro parts of this state are not contributing in the same way," Deck said. "That's something for us to watch and it's a change from the first half of last year to the second half of this year."
The state's overall unemployment rate is below the national average but per capita income is lower than the rest of the country. The per capita income rate in northwest Arkansas remains higher than the national average but that gap closed this past year.
There was a significant drop in the northwest Arkansas job force numbers, which Deck said was because the region had reabsorbed those workers who had left the market during the recession of a decade ago. The state's labor force number was actually negative from 2015 to 2016.
"I'm looking for job growth in places that are not northwest Arkansas or central Arkansas or Jonesboro," Deck said of her hopes for 2017.
The luncheon's presentations were moderated by Shelley Simpson, the chief marketing officer and executive vice president of J.B. Hunt Transport Services Inc. of Lowell. Stuart Mackintosh, the executive director of the Group of Thirty financial think tank, gave the global forecast, and former Department of Commerce economic advisor Ellen Hughes-Cromwick gave the national forecast.
Mackintosh opened with the disclaimer that his forecast represented his opinion and not those of the Group of Thirty. Mackintosh spoke of his worries about the "retreat" of globalization and a rise of individual country's mercantilism amid a "modestly positive" world economic forecast.
Hughes-Cromwick said the current American economy has expanded for 30 consecutive quarters, one of the longest in history.
"The consumer has been the heart and soul of this economic expansion," Hughes-Cromwick said. "There's only three economic expansions in U.S. history have been longer.
"Sustained economic expansion is a very healthy backdrop, even though we're not happy it's 2 percent growth as opposed to 3 or 4. Having sustained economic expansion in a post-financial crisis period is excellent; I'd give that a 5-star rating. Sustainability is more important than the rate of growth at this point in the business cycle."