ROGERS -- Northwest Arkansas and the rest of the state can expect a healthy economic year with thousands of new jobs created, a regional economist said Friday.
Mervin Jebaraj, director of the University of Arkansas Center for Business and Economic Research, delivered a rosy annual business forecast to hundreds of people from local governments, nonprofit groups, businesses and industries at the John Q. Hammons Center. As always there's ways for the region to do better, he added, such as building affordable housing and increasing research spending at the university.
The University of Arkansas Center for Business and Economic Research keeps updated economic statistics for Northwest Arkansas and compiles its reports at cber.uark.edu.
Last year was a high point for the state and region, with unemployment at or near record lows and employment reaching record highs, Jebaraj said. He didn't see anything that should turn that kind of economic well-being around, projecting 1o,000 more jobs by the end of this year in Northwest Arkansas.
"We've had immensely strong employment growth and wage growth," thanks in large part to incomes in Benton County, he said. The California-based nonprofit Milken Institute, a think tank whose chairman also spoke at the forecast luncheon, ranked the Fayetteville-Springdale-Rogers metropolitan area as the 25th best-performing large city in the country last year based on economic growth powered by food manufacturing and health care.
Health care, leisure and hospitality -- breweries and restaurants -- and construction led the area's job growth last year and likely will keep playing an outsize role in 2018, Jebaraj said.
The gradual opening of Arkansas Children's Hospital that started this month and continuing expansions by Mercy Northwest Arkansas and other local health systems should mean hiring hundreds of nurses, technicians and physicians.
Jebaraj noted health care jobs around the state have grown steadily since 2014, around when Arkansas implemented plans under multiple names to expand the Medicaid program by helping low-income adults buy health insurance. The programs stemmed from the Affordable Care Act, often termed Obamacare.
Republicans in Congress and President Donald Trump last year ended an Obamacare provision that required taxpayers to buy health insurance or pay a tax penalty, so that penalty will no longer be in place starting in 2019. Jebaraj said the impact of that change on Arkansas' hospitals and health care employment isn't yet clear.
Jebaraj saw several challenges, including a labor force participation rate that remains lower than it was before the Great Recession that ran from 2007 to 2009, and the continual need for housing that's affordable for all kinds of incomes. Developers in recent years in Northwest Arkansas have skewed new houses and apartments toward wealthier tenants and buyers, and Census estimates show housing costs are taking up more of each paycheck for families making $35,000 or less a year.
Jebaraj urged the region's cities and builders to keep those concerns in mind and think about how to organize and plan housing in a way that can encourage mass transit. Housing costs are drawing more local attention these days; the university with support from the Walton Family Foundation is holding a regional attainable housing forum the first weekend in February to explore the issue and potential solutions.
Michael Milken, chairman of the institute, expanded on Jebaraj's concerns, saying communities like Northwest Arkansas must invest effort and resources in education and social opportunity to keep up with a changing world. He and Jebaraj said Arkansas should boost its relatively low spending on research and development at its universities.
The University of Arkansas, Fayetteville, spent about $145 million on research in 2016, according to the National Science Foundation, less than a fourth of the University of Texas at Austin's figure.
"If you're going to change the world and change the environment here, this is a good place to start," Milken said.
Chancellor Joseph Steinmetz has made enhancing the university's research activities one of his eight guiding priorities. The push includes improving the application process for grants and encouraging departments to work together in their studies, according to the university's strategic plan.
The university last fall opened the Brewer Family Entrepreneurship Hub to help faculty and students use their research discoveries as the seeds for new businesses and products.
"We're giving entrepreneurs a reason to stick around and build something successful," Steinmetz said at the hub's opening in downtown Fayetteville in September.
University spokesman Steve Voorhies in an email Friday said the university is still among the top in the country in research activity and has been steadily upping spending.
"We are working to continue that growth and move more advances and discoveries into the marketplace to support new jobs and improve lives," he wrote.
Nelson Peacock, CEO and president of the nonprofit Northwest Arkansas Council, came to the position last summer after working as senior vice president for government relations with the University of California system, which logs billions of dollars in research spending each year.
He said California created and invested in the university system decades ago and deliberately began recruiting skilled faculty and students and drawing in research grants in order to keep people from leaving for the East Coast. It took years of concerted effort, he said, and Arkansas will need the same.
"I think the university is starting to see that need to do more, but I think we're starting in a hole from 20, 30 years," Peacock said. "The more you do, the better opportunities you're going to have."
NW News on 01/27/2018
Print Headline: Northwest Arkansas gets rosy forecast