Arkansas at Will Employment

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Arkansas at Will Employment Powered By Docstoc
					September 30, 2009

Presentation Notes
•   Analysis of Arkansas' situation
    – Overview: The 'basic' economy
    – Employment, production and income
    – Issues facing the state

•   Results of focus group meetings
    – Common observations and issues
    – Specific regional issues
                               Real U.S. Gross Domestic Product Growth Rate
   10.0%
    8.0%
    6.0%
    4.0%
    2.0%
    0.0%
   -2.0%
   -4.0%
   -6.0%
   -8.0%
  -10.0%
           1980.Q1

                     1982.Q1

                                1984.Q1

                                          1986.Q1

                                                    1988.Q1

                                                              1990.Q1

                                                                        1992.Q1

                                                                                  1994.Q1

                                                                                            1996.Q1

                                                                                                      1998.Q1

                                                                                                                2000.Q1

                                                                                                                          2002.Q1

                                                                                                                                    2004.Q1

                                                                                                                                              2006.Q1

                                                                                                                                                        2008.Q1
Source: U.S. Commerce Department, Bureau of Economic Analysis
                              Change in Inventories, Seasonally Adjusted, Annualized
                                             (Constant 2005 Dollars)
                      $150

                      $100
Billions of Dollars




                      $50

                        $0

                      -$50

                 -$100

                 -$150

                 -$200
                             1997.1
                             1997.3
                             1998.1
                             1998.3
                             1999.1
                             1999.3
                             2000.1
                             2000.3
                             2001.1
                             2001.3
                             2002.1
                             2002.3
                             2003.1
                             2003.3
                             2004.1
                             2004.3
                             2005.1
                             2005.3
                             2006.1
                             2006.3
                             2007.1
                             2007.3
                             2008.1
                             2008.3
                             2009.1
                       Source: U.S. Commerce Department, Bureau of Economic Analysis
                                                        10.0
                                                               20.0
                                                                      30.0
                                                                             40.0
                                                                                    50.0
                                                                                           60.0
                                                                                                  70.0




                                                  0.0
                                         Jan-00
                                         Jul-00
                                         Jan-01
                                         Jul-01
                                         Jan-02
                                         Jul-02
                                         Jan-03




Source: Institute of Supply Management
                                         Jul-03
                                         Jan-04
                                         Jul-04
                                         Jan-05
                                         Jul-05
                                         Jan-06
                                                                                                         Purchasing Managers Index




                                         Jul-06
                                         Jan-07
                                         Jul-07
                                         Jan-08
                                         Jul-08
                                         Jan-09
                                         Jul-09
                                                                                          100
                                                                                                120




                                                                  0
                                                                      20
                                                                           40
                                                                                60
                                                                                     80
                                                         Jan-00
                                                         Jul-00
                                                         Jan-01
                                                         Jul-01
                                                         Jan-02
                                                         Jul-02
                                                         Jan-03
                                                         Jul-03
                                                         Jan-04
                                                         Jul-04




Source: University of Michigan, Survey Research Center
                                                         Jan-05
                                                         Jul-05
                                                         Jan-06
                                                         Jul-06
                                                                                                      Index of Consumer Sentiment




                                                         Jan-07
                                                         Jul-07
                                                         Jan-08
                                                         Jul-08
                                                         Jan-09
                                                         Jul-09
                                      -15.0%
                                               -10.0%
                                                                0.0%
                                                                       5.0%
                                                                              10.0%
                                                                                      15.0%




                                                        -5.0%
                             Jan-00
                             Jul-00
                             Jan-01
                             Jul-01




Source: U.S. Census Bureau
                             Jan-02
                             Jul-02
                             Jan-03
                             Jul-03
                             Jan-04
                             Jul-04
                             Jan-05
                             Jul-05
                             Jan-06
                             Jul-06
                             Jan-07
                             Jul-07
                             Jan-08
                                                                                              United States Retail Sales Year-over-Year Growth Rates




                             Jul-08
                             Jan-09
                             Jul-09
                             Unemployment Rates, Not Seasonally Adjusted
10.0%
 9.0%
 8.0%
 7.0%
 6.0%
 5.0%
 4.0%
 3.0%
 2.0%
 1.0%
 0.0%
        Jan-00


                          Jan-01


                                            Jan-02


                                                              Jan-03


                                                                                Jan-04


                                                                                                  Jan-05


                                                                                                                    Jan-06


                                                                                                                                      Jan-07


                                                                                                                                                        Jan-08


                                                                                                                                                                          Jan-09
                                                                                                                             Jul-06
                 Jul-00


                                   Jul-01


                                                     Jul-02


                                                                       Jul-03


                                                                                         Jul-04


                                                                                                           Jul-05




                                                                                                                                               Jul-07


                                                                                                                                                                 Jul-08


                                                                                                                                                                                   Jul-09
 Source: Bureau of Labor Statistics                                                      United States                                           Arkansas
            Nearly 8 million jobs lost:
                                        U.S. Non-Farm Employment
            140,000
            139,000
            138,000
            137,000
            136,000
            135,000
Thousands




            134,000
            133,000
            132,000
            131,000
            130,000
                      Jan-07




                                                Jan-08




                                                                          Jan-09
                               Jul-07




                                                               Jul-08




                                                                                   Jul-09
   Source: Bureau of Labor Statistics
                                     Source: Bureau of Labor Statistics
                          Change in U.S. Employment by Sector
                              August 2008 - August 2009
                                                   Education and Health Services
                                                                     Government
                                                                    Other Services
                                                           Leisure and Hospitality
                                                                        Non-Farm         -4.4%
                                               Trade, Transportation, and Utilities
                                                               Financial Activities
                                                                      Information
                                               Professional and Business Services
                                                              Mining and Logging
                                                                   Manufacturing
                                                                     Construction

-15.0%          -12.0%            -9.0%            -6.0%          -3.0%           0.0%           3.0%

Source: Bureau of Labor Statistics, CBER Calculations
•   Declines in house prices have been region-
    specific
•   Areas with the highest rates of appreciation
    have suffered the largest losses.
•   Arkansas as a whole never experienced an
    excessive boom, nor has it been severely
    effected by the subsequent bust.
                   Year-Over-Year Changes in Housing Prices
14

12

10

 8

 6

 4

 2

 0

-2

-4
                                             Arkansas        U.S.
-6
     2000   2001   2002        2003       2004       2005        2006        2007   2008   2009

                          Source: Federal Housing Finance Authority (FHFA)
                      Year-Over-Year Changes in House Prices
14

12

10

8

6

4

2

0

-2

-4
               Fayetteville-Springdale-Rogers          Fort Smith      Little Rock-N. Little Rock-Conway

-6
     2000   2001      2002         2003         2004       2005     2006        2007        2008           2009

                             Source: Federal Housing Finance Authority (FHFA)
• Arkansas employment during the
  recession – Three phases:
   Dec. 2007 – Sept. 2008: Slow growth

   Oct. 2008 – March 2009: Sharp decline

   Since March 2009: Stabilization
Arkansas Nonfarm Payroll Employment
          Indexes of Nonfarm Payroll Employment for Arkansas and MSAs
                                                                (Dec. 2007 = 100)

                Arkansas Statewide and Little Rock MSA                                         Fayetteville and Fort Smith MSAs
104                                                                        104


102                                                                        102


100                                                                        100


98                                                                          98


96                                                                          96


94                                                                          94
      Jan07 Apr07 Jul07 Oct07 Jan08 Apr 08 Jul08 Oct08 Jan09 Apr09 Jul09         Jan07 Apr07 Jul07 Oct07 Jan08 Apr 08 Jul08 Oct08 Jan09 Apr09 Jul09
                        ARKANSAS          Little Rock      US                                      Fayetteville     Fort Smith        US


                     Jonesboro and Pine Bluff MSAs                                             Hot Springs and Texarkana MSAs
104                                                                        104


102                                                                        102


100                                                                        100


 98                                                                         98


 96                                                                         96


 94                                                                         94
      Jan07 Apr07 Jul07 Oct07 Jan08 Apr 08 Jul08 Oct08 Jan09 Apr09 Jul09         Jan07 Apr07 Jul07 Oct07 Jan08 Apr 08 Jul08 Oct08 Jan09 Apr09 Jul09
                        Jonesboro        Pine Bluff       US                                       Hot Springs       Texarkana        US


                            SOURCES: U.S. Bureau of Labor Statistics and the Institute for Economic Advancement.
      Metro Area Payroll Employment
          Employment Growth Over Three Phases of Recession
                                                              Percent Changes
                                                  Dec. 2007 -    Oct 2008 - March 2009 -
                                                   Oct. 2008    March 2009    Aug. 2009

  Fayetteville - Springdale - Rogers                   -0.20            -1.03      -0.12
               Fort Smith                              -0.33            -1.80      0.21
              Hot Springs                              -0.98            0.22       2.50
               Jonesboro                                0.72            0.76       0.04
 Little Rock - N. Little Rock - Conway                 -0.16            -1.14      -0.02
                Pine Bluff                             -0.86            -1.35      0.01
               Texarkana                                1.28            -0.80      -0.85
          ARKANSAS TOTAL                               -0.15            -2.26      0.05
                   U.S.                                -1.03            -2.73      -1.34

Source: U.S. Bureau of Labor Statistics,
Seasonally Adjusted data for MSAs is from the Institute for Economic Advancement
                   Unemployment Rates:
                           Metro Area Unemployment Rates
                                          Not Seasonally Adjusted                 Seasonally Adjusted*

                                      July 2008 June 2009 July 2009           July 2008 June 2009 July 2009
 Fayetteville-Springdale-Rogers          4.2         6.1        6.2             3.8        5.6       5.5
            Fort Smith                   5.0         7.8        7.7             4.9        7.7       7.5
            Hot Springs                  5.4         7.0        7.1             5.1        6.7       6.7
            Jonesboro                    5.1         7.2        7.3             4.6        6.7       6.6
Little Rock-N. Little Rock-Conway        4.6         6.6        6.7             4.2        6.1       6.2
             Pine Bluff                  7.5         9.5        9.9             6.9        9.0       9.1
            Texarkana                    4.8         6.5        6.7             4.5        6.2       6.3

          Arkansas Total                 5.3         7.5        7.7             5.0        7.2       7.4

            U.S. Total                   6.0         9.7        9.7             5.8        9.5       9.4

 Source: U.S. Bureau of Labor Statistics
*MSA data are seasonally adjusted by the Institute for Economic Advancement
   50% of jobs lost have been in construction and
    manufacturing sector

   Manufacturing production expected to gradually increase
    during 4th quarter and stronger growth projected in the 2011-
    2014 time period

   Five industry sectors most impacted by downturn all have
    strong ties to Arkansas: motor vehicles, wood products,
    furniture, textile products and primary metals

   Two trends may provide early opportunities for Arkansas:
    Excess inventories are declining and housing market showing
    signs of recovery. New orders for capital goods are on
    upswing.
   Sectors with largest potential employment gain, 2010-2014
    • Machinery
    • Fabricated metals
    • Aerospace and other transportation
    • Food and beverage products
    • Chemicals


   Sectors with moderate potential employment gain, 2010-2014
    • Primary metals
    • Wood and paper products
    • Plastics
           Educational Attainment of People in Arkansas and the U.S., 2005-2007

                                               6%
   Graduate or professional degree
                                                       10%

                                                            12%
                Bachelor's degree
                                                                      17%
                                               6%
                Associates degree
                                                 7%

                                                                               21%
          Some College, no degree
                                                                             20%
                                                                                                        36%
High school diploma or equivalency
                                                                                            30%

                                                                          19%
    Less than high school diploma
                                                                    16%

                                     0%   5%          10%     15%         20%        25%   30%    35%         40%

                                                U.S.              Arkansas



            Source: U.S. Census Bureau, American Community Survey, 2005-2007.
                          Poverty Rates in Arkansas and the U.S., 2005-2007

                                                   13%
       People age 65 and over
                                             10%


                                                                       25%
Related children under 18 years
                                                          18%


                                                   13%
                   All Families
                                             10%


                                                                                         38%
  Female householder families
                                                                             29%


                                  0%   5%   10%     15%    20%        25%    30%   35%    40%

                                            U.S.           Arkansas


               Source: U.S. Census Bureau, American Community Survey, 2005-2007.
                      Overall Assessments:*
                       Fayetteville              2.0
                       Fort Smith                2.3
                       Magnolia                  2.7
                       Little Rock               2.1
                       Jonesboro                 2.1
                       Monticello                2.7
                       Pine Bluff                4.0

*Mean responses to the question: “How is this area’s economic condition compared to
the nation’s economy?”
1 = Much Better, 2 = Better, 3 = About the Same, 4 = Worse, 5 = Much Worse
 Some   Common Themes:
 › Arkansas economy vs. U.S.

 › Infrastructure concerns

 › Labor markets and workforce issues

 › Capital investments and business
   expansions
 Regional   Differences

 › Central and Southern Arkansas

 › Northwest Arkansas

 › Northeast Arkansas and the Delta

				
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