Northwest Arkansas tries new economic measuring stick

Peer cities expose areas for improvement

LOWELL -- Northwest Arkansas is used to running in the front of the pack when it comes to economic growth. The area's 4.1 percent job growth, 3.9 percent unemployment rate and 1.9 percent population growth are well ahead of comparable cities such as Tulsa, Okla., and Omaha, Neb.

"We were knocking it out of the park against those cities," Mike Malone, president and CEO of the Northwest Arkansas Council, said during a luncheon Friday. "A year ago, we decided we needed to set the bar higher. We want to compete in another class."

Peer comparison

City 2014 Population 2013 Population Growth 2013-14 MSA growth rank

Fayetteville501,653 492,375 1.9% 36th

Austin, Texas1.94 million 1.89 million 3% 3rd

Raleigh, N.C.1.24 million 1.22 million 2.3% 15th

Madison, Wisc.633,787 627,466 1% 109

Des Moines, Iowa611,548 600,086 1.98% 35th

Durham-Chapel Hill, N.C.542,710 533,622 1.7% 42nd

Source: Center for Business and Economic Development

The paradigm shifted Friday when local business leaders learned how the area stacks up against a new set of benchmark cities that includes Austin, Texas, and Raleigh, N.C. The area continues to have strong numbers, but the new comparison exposes some weaker areas.

The luncheon showcased the release of the annual State of Northwest Arkansas Region Report prepared by the Center for Business and Economic Research at the University of Arkansas in collaboration with the council. About 200 people attended the event at the Northwest Arkansas Board of Realtors Event Center in Lowell.

Kathy Deck, director of the center, said the new cities will help Northwest Arkansas leaders set new goals and policies.

"We want to compare ourselves with areas we want to be mentioned with in the same breath," she said.

She asked luncheon attendees what cities come to mind when they think of places to strive to be like. The answers were Austin and the Research Triangle that includes the Raleigh-Durham, N.C. area. Other cities used for peer comparisons are Des Moines, Iowa, and Madison, Wis.

"Not only are are we doing as well as some of these fantastic places to live, we are in fact leading them in so many different places," she said. "I think that just goes to reiterate what a great value Northwest Arkansas is as a place to do business and a place to live."

Just because Northwest Arkansas is now comparing itself to these cities does not mean the area comes to mind in other parts of the country. Sylnovia Rabb, assistant director of the Austin Economic Development Department, said Northwest Arkansas has never come up.

She said the Austin metropolitan statistical area's population is nearly 2 million, and they often compare themselves to Portland, Denver and Raleigh-Durham.

"We are known as Little Silicon Valley," she said.

Northwest Arkansas' 4.1 job growth between 2013-2014 equaled growth in Austin and beat the remaining peer cities. The peer average employment growth rate was 2.9 percent.

The gross domestic product grew 4.4 percent between 2010 and 2014, faster than the 3.5 percent growth among the peer cities.

The Northwest Arkansas data is for the metropolitan statistical area that includes Benton, Washington and Madison counties and McDonald County, Mo., and some metrics vary within the area.

The new comparisons aren't all rosy, she said, pointing out places the area lags such as educational attainment, or people with a bachelor's degree or higher. The area's 27.9 percent of residents with with degree was well below the peer average of 42.1 percent.

And while Northwest Arkansas leads the state in per capital personal income and average annual wages, it trails its peers. The area's per capital personal income was $37,863, slightly ahead of the state's rate of $36,698. The peer average was $46,251.

Deck said salaries have been stagnant nationwide and would expect the area's low unemployment rate to put pressure on employers to increase wages and help Northwest Arkansas catch up to peer cities. Benton County led the nation at the end of 2014 with its 9.9 percent average weekly wage growth.

She said the August 3.6 percent unemployment rate is getting to the point where companies start complaining they can't find workers.

"Rah, rah is fun, but this also gives us the kinds of the insights that we need to know if we were performing at the level of our aspirants, our peers," Deck said.

Mike Harvey, chief operating officer of the Northwest Arkansas Council, said running in a new pack means the area is no longer the alpha dog.

"We want to see where the challenges are," he said.

The new peer cities were introduced in January when the council released its three-year plan that outline four key areas that include workforce development, economic development, stewardship and infrastructure.

Workforce development and educational attainment are areas that need to be bolstered to match the area's peer cities, but are also places Philip Taldo sees Northwest Arkansas as a state leader. Taldo is a broker and co-owner of Griffin Company Realtors commercial division and a member of the Arkansas Economic Development Commission.

"Those are buzz words around the state and have been buzz words up here for the past few years," he said, pointing to programs ranging from junior high school students exploring different careers to adults getting new and additional training from Northwest Technical Institute in Springdale.

"I think we have a good template for the rest of the state."

NW News on 10/03/2015

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