Wholesale trade, transportation out front in area’s economic rebound
Economic conditions in Central Arkansas continued to improve throughout 2022, an indication local business growth and employment have broken the stranglehold the pandemic had on the local economy.
Several sectors produced powerful growth, led by robust activity in the wholesale trade and transportation-warehouse sector, which generated 30% job growth from 2021 and more than doubled the national average. Growth in the financial services sector also was double the national average, jumping to 7.2% year over year compared with the overall U.S. growth rate of 3.4%.
Growth in wholesale trade and warehouse jobs was boosted primarily by the opening of two new Amazon warehouses in Little Rock and North Little Rock with contributions from other firms such as Lowe’s and Dollar General, which followed Amazon’s lead and have added similar jobs. The region is attractive because it features lower congestion, a central location in the nation, strong transportation infrastructure and costcompetitiveness. “There is evidence this trend will continue into 2023 and beyond,” according to findings released last week by Metroplan in its Little Rock Regional Economy in 2023 report, which tracks economic trends for the Little Rock-North Little Rock-Conway metropolitan statistical area.
Strong economic growth is producing a solid foundation that should weather any downturns and recessionary conditions.
The regional economy demonstrates a pattern of steady growth,” Metroplan reported. “The Little Rock region’s comparative economic diversity, and the presence of sturdy industries like hospitals, universities and state government means that a downturn — even if it happens — will be milder than average. The best bet for the local area is that 2023 will see an unspectacular yet stable economic trend.”
Local government suffered severe job losses in 2022, with Metroplan citing a negative 8.4% rate compared with growth of 3.4% nationally. The trend, the report noted, could be the result of “workers possibly lured to betterpaying sectors in a time of labor shortage.”
Total jobs in the region increased 6.2%, slightly lower than the U.S. average of 7.5%.
“However, since local jobs were less hard-hit by the recession of 2020 to begin with,
the region’s post-recession performance has been creditable,” the analysis said.
Manufacturing also gained strength last year, with job expansion besting the national average. Manufacturing jobs in Central Arkansas increased 8.6% compared with the national average of 6.5%.
The retail sector continued to bounce around though the sector seems to be moving back to a steady pace, according to Metroplan.
Not so for construction, which was hammered by rising interest rates throughout 2022. “Following a post-covid miniboom, housing construction slowed … from the summer of 2022 onward, as interest rates rose,” the report said.
One major result of the pandemic has been the rise in employees who are working from home, with slightly more than one in 10 staying home to do their jobs — a rate that has tripled from 2019-2021. “This change suggests long-lasting implications for Central Arkansas districts hosting large amounts of office space, especially downtown Little Rock,” Metroplan said.
Even with the robust growth, the region remains behind U.S. levels of employees working from home, which reached nearly 18% over the same period.
Metroplan is a regional planning agency with members in Pulaski, Faulkner, Saline, Lonoke and Grant Counties.
HOME EQUITY GROWING IN ARKANSAS
Equity for Arkansas homeowners is rising though the state remains below national averages in the fourth quarter last year. However, Arkansas did register a quarterly increase as national averages dipped.
A fourth-quarter 2022 study by Attom Data Solutions, which collects real-estate information nationwide, reports that nearly 38% of all homeowners in Arkansas are equity-rich, meaning they owe a lender less than 50% of the price they could sell their home.
That’s a slight increase from 36.6% in last year’s third quarter and up from 28.9% in 2021.
Nationally, 48% of homeowners with a mortgage were equity-rich in the fourth quarter of 2022, slipping from 48.5% the previous quarter.
The portion of equity-homeowners declined in 31 states and the fourth quarter decrease reversed 10 straight quarters of gains.
“Dents are beginning to surface in the armor around the U.S. housing market after 11 years of a strong showing for owners,” Attom Chief Executive Officer Rob Barber said in a statement announcing the results. “Home values have been dropping since the middle of last year, which appears to be starting to cut into homeowner equity around the country.”
Northwest Arkansas continues to lead the state, with the Fayetteville-Springdale-Rogers corridor registering 53.8% of homeowners as equity-rich, an increase from 52.8% in the third quarter and up from 39.3% a year ago.
Central Arkansas reported 28.8% of mortgage holders as equity-rich, a bump up from 27.4% in the third quarter and from 21.7% a year ago.
FEMALE ENTREPRENEURS FEATURED
Four women who have excelled in business will share key lessons learned and offer advice to Arkansas start-ups in a free 90-minute session Wednesday.
The featured speakers have built companies in the innovation and research fields. Speakers will include Deme Yuan, co-founder of FR8relay; Stacey Reynolds, owner of Blue Yoga Nyla; Cindy Adams, owner of Revive MyofascialRelease; and Kim Tran Sr., who has led efficiency initiatives for Murphy Oil.
Topics for the virtual session, which is scheduled from noon-1:30 p.m., will focus on management and growth strategies, commercialization opportunities, startup mistakes and how to avoid them and key skills for entrepreneurial success.
The session is sponsored by the Arkansas Small Business and Technology Development Center and more information is available at asbtdc.org.