Fed report mixed on growth in state

The overall economic outlook in Arkansas and surrounding states remains “slightly pessimistic,” differing from a generally positive feeling about the national economy, according to a report released Wednesday by the Federal Reserve.

The Fed’s Beige Book report outlines economic conditions in 12 regions, including the St. Louis district covering Arkansas and Texas along with parts of Illinois, Kentucky, Louisiana, Missouri, Mississippi, Ohio and Tennessee.

Economic conditions in the region remained mixed, but the report noted that Arkansas has experienced a boost in manufacturing activity, home sales and barge traffic since the last Beige Book report was issued a month ago.

“There was a slight uptick in employment,” the regional report said. “Wage increases were widespread and higher than in previous years for the vast majority of firms.”

In Arkansas, economy activity will increase slightly though overall activity will track lower than the nation, the report said.

“There’s certainly some mixed views,” said Michael Pakko, chief economist with the Arkansas Economic Development Institute at the University of Arkansas at Little Rock. “I think the general outlook is that we will see some slower growth into next year then we have for the past year or two.”

The manufacturing sector is a strong spot for the state, but the pickup there may just be the result of a rebound from years of job losses and factory closings.

“Our manufacturing employment has been performing a little bit better than the nation the past few years and I’m expecting that will continue,” Pakko said.

“This is not a transformational change. The pickup in employment we’re seeing is after decades of decline and it’s a small recovery.

“It’s a sign of a more balanced growth path than we’ve seen for a while,” he said.

The agriculture industry remains somewhat distressed in Arkansas and across the region. “Agriculture conditions remained strained by low crop prices and generally poor production and yields,” the report said.

Wednesday’s report from the Fed is the last Beige Book for 2019. The Fed conducts eight surveys every year in an effort to get feedback from businesses and economic development experts. It relies on anecdotal evidence through interviews to gauge the economy and report on vital items such as consumer spending and manufacturing activity.

Sources for the report include businesses, community contacts, economists, market experts and other sources.