The Federal Reserve Bank of St. Louis’ fourth quarter Burgundy Book shows a large swath of Arkansas seeing marked economic improvement.
The report on economic conditions in six of the state’s eight Metropolitan Statistical Areas (MSAs) examined employment, manufacturing, real estate, banking, and consumer debt. You can access the full report at this link.
The six MSAs covered by the report in what the Feds call “the Little Rock Zone” include Little Rock/North Little Rock/Conway, Pine Bluff, Hot Springs, Texarkana, Fort Smith and Fayetteville/Springdale/Rogers. Neither the Jonesboro nor Memphis/West Memphis MSAs are included in the study.
EMPLOYMENT & WAGES
The Burgundy Book noted that Arkansas employment and unemployment improved in 2012 despite a small dip towards year-end.
The sector showing the most improvement was related to trade, transportation and utilities, while four industry sectors saw setbacks.
“Compared with a year earlier, employment growth during the fourth quarter of 2012 was especially robust in trade, transportation, and utilities,” the report stated. “Notable declines were seen in the natural resources, mining, and construction and information industries.”
The zone’s farm sector “fared well” in 2012 relative to most other areas of the nation, the report added.
The Feds also noted that per capita income in Arkansas continued to increase faster than the U.S. average in the third quarter of 2012. Income growth was primarily due to growth in labor earnings.
“Manufacturing employment in Arkansas finally exhibited some positive (though almost negligible) growth,” according to the book.
Durable goods manufacturing employment contributed 1.5 percent to the growth rate, while non-durable goods employment tempered the gains.
“Durable goods employment has historically been the primary driver in manufacturing employment changes in Arkansas, but the non-durable goods sector has exerted a stronger influence in recent quarters,” the report said.
Earnings in the manufacturing sector have seen growth – roughly 4.8 percent – which “modestly trailed” the national growth rate of 5.4 percent during the fourth quarter.
With home sales improving, there was guarded optimism on several fronts related to residential and commercial real estate, construction, and lending.
On the residential construction side, single-family building permits in 2012 increased throughout in all MSAs except Pine Bluff.
Multi-family real estate activity continued to show improvement, according to the Feds.
“Asking rent in Little Rock enjoyed 3 percent growth in the fourth quarter of 2012 compared with a year ago,” the report noted. “Asking rent has increased consistently over the past five quarters. As a result, multifamily developers continue to look for new sites for construction in the Little Rock area.”
The office real estate market in Little Rock experienced a strong ending in 2012, according to the analysis.
In the fourth quarter, the vacancy rate dropped by 2 percentage points, on a year-over-year basis, to 12.5 percent.
“This is far below the national rate of 17 percent. The lower vacancy rate is probably due to increasing demand, as both office asking rent and effective rent have increased modestly,” the report noted.Click here to continue reading this report from TalkBusiness.net.