BENTONVILLE — Northwest Arkansas is ahead of the country coming out of the recession.
The housing market is showing signs of improvement, building permits are on the rise and employment is increasing, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas.
“I won’t say we have recovered — there are lingering effects — but we are on the right path,” she told about 120 people Wednesday at the Quarterly Business Analysis luncheon. “The new normal is the old normal at a lower level.”
The number of houses sold in Benton and Washington counties is showing a steady increase as average prices inch up.
Building permits remain low compared to the boom years between 2002 and 2006 but are slowly growing.
“Housing will not go gangbusters for some time, but it won’t be a drag on the overall economy,” she said.
Commercial building is also showing signs of improvement.
Phil Jones, project development officer at Nabholz Construction Services, said public projects, including schools, have kept the company busy during the past couple years, and he’s seeing a bit more activity in the private sector.
“We feel if investors and business owners had a bit more confidence they would loosen up a bit,” he said.
Nabholz had some cutbacks in 2009, and while manpower levels aren’t at 2007 or 2008 levels, the company does have a handful of openings in Fayetteville, Jones said.
“We are seeking some specialized workers,” he said.
An increase in higher skilled workers is a bright spot in the record-breaking employment numbers the area posted in June. The Bureau of Labor Statistics reported 211,000 jobs in the area, a 3.4 percent jump from June 2011.
Deck said jobs increased 6 percent in the professional and business services sector that includes lawyers and accountants.
“These value-added positions require educated workers and tend to be higher paying,” Deck said.
Northwest Arkansas residents are becoming more educated with 25 percent of the population having a bachelor’s degree.
“That is huge for employer recruitment, but we need to remember our competitors can boast rates more than 30 percent,” Deck said.
Income for workers across all sectors has been stagnant nationwide. Average wage growth in the first quarter inched into positive growth after more than a year of declines.
“We have to see incomes rising to see overall recovery,” Deck said.
A lack of personal income growth is one reason consumer confidence remains low, she said.
“There are to many unknowns out there for the consumer,” she said.
Retail sales have done relatively well despite the low consumer confidence levels, she said, but growth rates year-over-year are slowing. The back-to-school and holiday seasons will provide a better look at the industry, and Deck said she expects smaller increases this year.
Eduardo Vinagre, national account manager for CHEP, USA, relies on the retail industry and said he expects things to steadily improve.
CHEP is a provider of pallet, container and crate pooling services for many of the world’s largest supply chains including Walmart. Vinagre works out of Bentonville.
“It’s a difficult environment, but we are all working together to get through it,” he said. “We are making the best of a difficult situation for all.”
Web Watch
Economic Data
The Center for Business and Economic Research at the University of Arkansas started publishing monthly and quarterly data on its website for Northwest Arkansas and will add national and state data.
Go to cber.uark.edu and click on Current Data on the left side of the page.