Virus toll projections indicate dire times ahead for state’s economy

The virus has begun destroying the economy, with initial reports and studies coming out last week predicting a full-blown recession for Arkansas later this year.

New reports, surveys and studies began rolling out that highlight the deep economic troubles ahead.

Projections for Arkansas for the remainder of 2020 are staggering:

■ 8.7% joblessness rate statewide with a payroll employment decline of more than 77,000 workers. Unemployment was at 3.5% in 2019.

■ Total unemployment of 117,500.

■ Personal income drop of 2.3% through September.

■ Consumer spending spiraling down 5.1% by July.

■ 20% sales decline in the leisure, hospitality and recreation sectors in Northwest Arkansas.

Mervin Jebaraj, director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas at Fayetteville, conducted one economic study that was released last week.

He noted that directives to close businesses in the restaurant and food-service industry, bars and clubs, gyms, and other recreation services and personal care services could take a heavy long-term toll.

“With uncertainty over how long some of these measures will be in place, small businesses in these industries may permanently close, prolonging the path to recovery from this temporary economic crisis,” Jebaraj wrote in the report.

Statistics show that half of small businesses that close, never reopen.

Leisure and hospitality has been growing rapidly in Arkansas, but no longer. Since the virus, the Capital Hotel in Little Rock has suspended operations. The Graduate hotel in Fayetteville has closed, along with the Holiday Inn Northwest Arkansas in Springdale and the Hilton Garden Inn in Bentonville.

Over the past week, a review by the Stephens Inc. bank research team found that energy, hotels and restaurants are areas more vulnerable for economic distress over the near term because of the virus.

Unemployment already is climbing in the state and the nation.

In the past two weeks alone, about 20,000 unemployment claims have been filed in Arkansas. That compares with an average of about 1,500 per week earlier in the year.

A poll by Impact Management Group revealed that about one in every three Arkansans indicated they or a household member has been laid off or seen a reduction in work because of the coronavirus.

Nationwide, 3.28 million workers — a record high — applied for unemployment benefits for the week ending March 21 as the coronavirus tore through the economy. That’s about five times the previous record high.

Future economic development and job creation is being impaired.

The coronavirus helped kill plans by Shandong Sun Paper to build a $1.8 billion

plant in Clark County that was projected to add 350 employees and provide 3,000 additional jobs in supporting industries.

There are positives on the horizon. The state has established a $7 million program to offer bridge loans to businesses and is working to set aside another $12 million for small-business loans.

And small businesses in Arkansas can apply for up to $2 million in low-interest loans through the U.S. Small Business Administration.

Thousands of landing pages and special websites have been established — every sector has a trade group that is collaborating on virus efforts — to pass along helpful recommendations to consumers and businesses struggling to survive economically.

The Arkansas Economic Development Commission has developed a solid site, arkansasedc.com/covid19, to provide quick and useful information to employers and workers. The site includes loan information for businesses that need financial help and some guidance for workers who have to file for benefits.

General information about business closings and the statewide impact of the virus can be found on a special landing page that this newspaper is offering at arkansasonline.com/coronavirus.

Beginning Tuesday, the Arkansas Small Business and Technology Development Center is offering free webinars to help business owners respond to the coronavirus outbreak, including one session in Spanish.

Upcoming sessions will focus on Small Business Administration loans and other economic aids being offered along with tips to move your business online to keep customers.

Learn more or register for programs at asbtdc.org/ asbtdc-events.

ENTERGY HELPS OUT

Entergy Corp. is contributing $700,000 to start an emergency relief fund to support customers during the coronavirus pandemic.

The fund will help provide basic needs such as food, rent and mortgage assistance.

Grants from the fund will be provided through United Way organizations and other nonprofit partners across Entergy’s service area. Company shareholders also will match employee contributions to the covid-19 relief efforts up to $100,000.

“The health and safety of our customers, employees and communities is Entergy’s top priority,” said Leo Denault, chairman and chief executive officer of Entergy. “During this challenging time, we are helping lessen the impact of this crisis on the most vulnerable in our communities.”

ROOMS FOR WORKERS

OYO Hotels & Homes is making sure there is room at the inn for medical personnel and first responders helping to stem the coronavirus outbreak.

The company is providing free stays for doctors, nurses

and other medical first responders.

“All of us at OYO are grateful for the bravery and sacrifices all the medical personnel are making to save lives and stop the spread of covid-19,” said CEO Ritesh Agarwal.

In Arkansas, OYO operates properties in Benton, Jacksonville, Heber Springs and Texarkana.

To use the program, call (628) 213-7020 (code: OYO-4FIRSTRESPONDERS). The company operates 43,000 hotels in 800 cities.

RUSSELLVILLE SALE

Cumberland Square Apartments in Russellville has new owners, Everest Investment Properties, which bought the property from Cumberland Square Associates.

The 36,786-square-foot complex on 3.28 acres is near St. Mary’s Regional Hospital and Arkansas Tech University. Constructed in 1980, the 50 one- and two-bedroom units are spread across 10 buildings.

Colliers International of Arkansas represented the buyers and sellers in the $1.425 million transaction.

“Its close proximity to medical, retail and Arkansas Tech will be a fantastic selling point to new tenants for years to come,” Cole Herger of Colliers said of the property.

CONSERVATION SIGN-UP

Farmers and ranchers are encouraged to apply to enroll grasslands in the U.S. Department of Agriculture’s conservation program. Registration ends May 15.

The initiative helps farmers and ranchers protect grasslands, rangelands and pastures while maintaining the area as working grazing lands.

“The program emphasizes support for grazing operations, and plant and animal biodiversity, while protecting land under the greatest threat of conversion or development,” the agency said in announcing registration.

Program participants retain the right to conduct common grazing practices, such as haying, mowing or harvesting seed from the enrolled land. They also will receive an annual rental payment and may receive up to 50% cost-share for establishing approved conservation practices.

To register, contact your local Farm Service Agency county office or go to fsa. usda.gov/crp.