State of the State Address

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State of the State Mid-Year 2023: Arkansas’ steel industry to bolster overall manufacturing sector

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by Michael Tilley (mtilley@talkbusiness.net)

The U.S. manufacturing sector has been soft in recent months, but Arkansas manufacturing job numbers are up more than 5% in the past two years. One sector advocate believes the job numbers would be higher if more people were in the workforce.

Manufacturing employment in Arkansas totaled 165,200 in July, up from 163,400 in July 2022 and above the 162,000 in the pre-pandemic July 2019. Manufacturing, once the state’s largest jobs sector, posted record employment of 247,600 in February 1995.

Among the three Arkansas metro areas with significant manufacturing activity, two have seen manufacturing job growth in the past five years. Manufacturing job numbers are up 6.3% in Northwest Arkansas during the past five years and up 9.3% in the Fort Smith metro. Manufacturing job numbers are down 6.5% in the Little Rock-North Little Rock metro in the past five years.

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-arkansas-steel-industry-to-bolster-overall-manufacturing-sector/

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State of the State Mid-Year 2023: U.S., Arkansas economies to be pressured but won’t falter

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by Michael Tilley (mtilley@talkbusiness.net)

Just a few months ago, it was considered a surprise if the U.S. economy did not enter into a recession, even if shallow. The more widely held belief now is similar to that of economist John Shelnutt who says the U.S. economy shows “no sign of faltering.”

Shelnutt, director of economic analysis and tax research at the Arkansas Department of Finance and Administration, told Talk Business & Politics that real U.S. GDP growth will remain resilient even “under the accumulated weight of interest rate hikes by the Federal Reserve.”

Goldman Sachs on July 19 lowered its closely watched recession odds from 25% to 20% but said economic growth may slow in the near term.

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-u-s-arkansas-economies-to-be-pressured-but-wont-falter/

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State of the State Mid-Year 2023: In education, Arkansas is in a state of change

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by Steve Brawner (BRAWNERSTEVE@MAC.COM)

Now that Gov. Sarah Huckabee Sanders’ LEARNS Act has become the law in Arkansas, public and private schools are in a state of change.

The wide-ranging 145-page law, which went into effect Aug. 1, increases minimum public school teacher salaries from $36,000 to $50,000, makes it easier for schools to fire underperforming teachers, and requires third-graders to read at grade level or potentially face being retained one year. Many of the law’s provisions remain to be determined though the rules process.

Perhaps its most contentious aspect is its creation of “education freedom accounts” that give families access to public school funds for private and homeschooling expenses. For the 2023-24 school year, that amount equals roughly $6,600, and it will increase each year as state funding for schools increases.

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State of the State Mid-Year 2023: Banks reacting to the Fed

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by Steve Brawner (BRAWNERSTEVE@MAC.COM)

Three high-profile bank failures earlier this year have not spread to the state. Meanwhile, banks are having to respond to rapidly rising interest rates. Overall, the state of banks in Arkansas is “stable but reacting.”

The U.S. banking system got a scare earlier this year when Silicon Valley Bank in Santa Clara, Signature Bank in New York, and First Republic Bank in San Francisco failed. So far, the fallout has not spread.

“We just did not see any of that turmoil that happened with those large institutions,” said State Bank Commissioner Susannah Marshall. “We did not see that here in Arkansas.”

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-banks-reacting-to-the-fed/

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State of the State Mid-Year 2023: Energy officials highlight positive outlook, price stability

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Lauren Waldrip, executive director of the Arkansas Advanced Energy Association

The Arkansas energy industry has many opportunities in which it can take advantage, including lowering costs and managing carbon emissions. Lauren Waldrip, executive director of the Arkansas Advanced Energy Association, is optimistic about the outlook.

“We’re seeing growth across the board, from an economic standpoint, from a demand standpoint, from a labor needs and development standpoint,” said Waldrip, noting the workforce in multiple sector segments, including energy efficiency, is expected to rise by 8% over the next year.

She expects federal resources available for energy efficiency projects to “bolster economic activity that will ultimately help Arkansans save money.”

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-energy-officials-highlight-positive-outlook-price-stability/

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State of the State Mid-Year 2023: Arkansas’ tourism industry booming

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by Tina Alvey Dale (tdale@talkbusiness.net)

Many spots in Arkansas continue to see record visitation in 2023 making tourism a strong part of the state’s economy, according to the Arkansas Department Parks, Heritage and Tourism (ADPHT).

Interim ADPHT Secretary Shea Lewis said May 2023 tourism collections were up 5.6% over May 2022, making it the highest collections for the month of May so far and the 27th consecutive month that Arkansas tourism has set a new monthly collection record.

“We are also up 9.8% year to date over 2022,” Lewis said.

Also, The Arkansas Tourism Ticker shows that healthy gains to begin 2023 for the state’s leisure and hospitality sector are continuing. Arkansas’ tourism tax is up more than 10% between January and April, with average tourism sector jobs up more than 5% in the first four months of 2023. The Arkansas Tourism Ticker is managed by Talk Business & Politics, and sponsored by the Arkansas Hospitality Association.

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-arkansas-tourism-industry-booming/

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State of the State Mid-Year 2023: Unwinding of the health care system

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by Steve Brawner (BRAWNERSTEVE@MAC.COM)

While the COVID-19 pandemic is considered by the federal government to be over, its effects on the health care system remain. In many ways, the state of the state’s health care might best be described as “unwinding.”

That’s especially the case with Medicaid, where “unwinding” is the word often used to describe what is happening. Throughout the pandemic, states halted their typical redetermination process because the federal government provided them extra money if didn’t cut their rolls. As a result, Arkansas’ Medicaid population increased by 230,000.

That changed in April, the month that states could resume redeterminations. Under state law, Arkansas has six months to complete its process.

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-unwinding-of-the-health-care-system/

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State of the State Mid-Year 2023: Transportation industry manages soft demand, uncertainty

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by Jeff Della Rosa (JDellaRosa@nwabj.com)

The trucking/transportation and logistics industry faces uncertainty in freight demand, including when it will begin to recover.

Shannon Newton, president of the Arkansas Trucking Association, has seen multiple economic cycles in her past two decades in the industry and offered an optimistic outlook. She’s hopeful the past includes the worst of inflation and consumers right-sizing spending. Still, she doesn’t expect a robust recovery.

“We’re going to toddler-walk out of it…in the way we’ve kind of walked into it,” she said. “We’re upright. We’re just a little unsteady in our steps. The industry as a whole has fared – [in] what is certainly economic uncertainty – fairly well,” added Newton, noting inexplicable demand and high costs. “Most of the members I’m talking with are weathering the uncertainty and trying to find ways…to maintain their talent, watch their costs, and wait until the economy becomes more stable and inflation subsides.”

https://talkbusiness.net/2023/08/state-of-the-state-mid-year-2023-transportation-industry-manages-soft-demand-uncertainty/

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State of the State 2023: Slower economic growth likely, with rebound in 2024

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by Michael Tilley (mtilley@talkbusiness.net)

The U.S. and Arkansas economies may have 99 problems, or more considering inflation, but a recession in 2023 ain’t one of them. Probably not, anyway. Or at least not a deep recession, according to arguably a growing consensus among economists.

John Shelnutt, Arkansas Department of Finance and Administration director of economic analysis and tax research, doesn’t anticipate a deep or disruptive U.S. recession in 2023.

“Most U.S. economic forecast groups currently have either a shallow recession in the first half of 2023 or a below-trend growth period during the year,” noted the economist who provides tax revenue guidance for Arkansas officials. “The differences are minor and derive from small variations in growth for personal consumption expenditures (PCE), the largest GDP component. Even the shallow recession camp of forecasts shows weak positive gains for PCE in inflation-adjusted (real) terms.”

https://talkbusiness.net/2023/01/state-of-the-state-2023-slower-economic-growth-likely-with-rebound-in-2024/

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State of the State 2023: Tourism officials tout busy 2023, push outdoor recreation

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by Tina Alvey Dale (tdale@talkbusiness.net)

Arkansas’ new secretary of the Arkansas Department of Parks, Heritage and Tourism, Mike Mills, believes now is an exciting time for the department. The almost 50-year veteran of the state’s tourism sector says the industry has recovered from the pandemic.

“As Arkansas State Parks celebrates its centennial year, the Arkansas tourism industry continues to thrive, having increased revenue consistently for the past 20 months,” said Mills, who was appointed to the cabinet position Jan. 12.

Data released by the department in September shows Arkansas’ tourism industry had record-breaking visitation in 2021 and has recovered after the significant decline in 2020 that was a result of the global COVID-19 pandemic. The state saw over 41 million visitors in 2021 compared to 29.2 million in 2020 and 36.3 million in 2019. Lodging spending increased 49% after a fall of 29% in 2020. That rebound led to lodging spending exceeding its 2019 level by 5%. The data was released during the Arkansas Hospitality Association’s annual convention in Little Rock.

https://talkbusiness.net/2023/01/state-of-the-state-2023-tourism-officials-tout-busy-2023-push-outdoor-recreation/

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State of the State 2023: Energy leaders hopeful this year after multiple 2022 surprises

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by Jeff Della Rosa (JDellaRosa@nwabj.com)

Energy industry officials look to greater stability, advanced energy investments and beneficial policies after facing multiple unexpected challenges last year. Surprises included Russia’s invasion of Ukraine and price volatility that impacted inflation, consumers and production investments to meet demand.

Still, advanced energy projects endured amid the expiration of an Arkansas rule ensuring solar array owners maintain projected savings. The grandfathering rule for solar projects expired Dec. 31; however, in late December, the Arkansas Public Service Commission issued a rule to extend it. The rule still needs legislative approval.

Lauren Waldrip, executive director for the Arkansas Advanced Energy Association, was surprised by the rule expiration but said she appreciated the commission’s new ruling, which can be referenced in the rulemaking process. If legislators approve the rule, grandfathering would be extended through May 31, 2040.

https://talkbusiness.net/2023/01/state-of-the-state-2023-energy-leaders-hopeful-this-year-after-multiple-2022-surprises/

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State of the State 2023: Trucking industry braces for easing demand, recession

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by Jeff Della Rosa (JDellaRosa@nwabj.com)

The trucking industry overcame multiple challenges in 2022, including some surprises, as the industry shifted from the COVID-19 pandemic into something more normal. With 2022 in the rearview, 2023 brings uncertainty and rising recession risk.

Shannon Newton, president of the Arkansas Trucking Association, said 2023 is not expected to be as healthy financially as 2022, especially in the first half of 2023. She’s hopeful the softer demand will begin to return to more normal levels and leads to growth opportunities by the end of the year.

“There’s a healthy amount of uncertainty,” said Newton, noting the economic forecasters who are predicting a recession in 2023. “Whether it is deep or wide or short or long, I think the opinions vary. But I think the industry expects there to be a recession of some sort in the early part of 2023.”

https://talkbusiness.net/2023/01/state-of-the-state-2023-trucking-industry-braces-for-easing-demand-recession/

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State of the State 2023: Construction sector faces inflation, labor, supply chain issues

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by George Jared (gjared@talkbusiness.net)

Arkansas’ construction sector dealt with a mix of new and old problems in 2022. Record inflation, interest rate hikes, and chronic supply chain issues continued to plague the industry during the last year and going into 2023.

Despite those problems, Nabholz CEO Jake Nabholz told Talk Business & Politics the company had a banner year and 2023 is projected to possibly be even better.

“I think everybody had a really good year,” he said. “As an industry we had to overcome record inflation and continued supply chain issues. We are excited about 2023, but I’m anxious to see what happens in 2024.”

https://talkbusiness.net/2023/01/state-of-the-state-2023-construction-sector-faces-inflation-labor-supply-chain-issues/

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State of the State 2023: School choice, other changes to follow pandemic’s disruptions

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by Steve Brawner (BRAWNERSTEVE@MAC.COM)

Arkansas’ K-12 public schools have returned to mostly normal operations after the pandemic, and now they face more permanent changes with a new governor planning to give parents more control over their children’s education.

Gov. Sarah Sanders hasn’t been specific about her plans for more “parental empowerment,” a term she prefers over “school choice,” where families have access to state funds for non-public education options like private schools. But it’s clear from her comments and from her early appointments that she intends to move the state in that direction. She nominated Jacob Oliva from Florida as her secretary of education, and Gretchen Conger from Arizona as her chief of staff. Both states have embraced school choice reforms in recent years.

In a recent interview with Talk Business, Sanders said she is working with legislators to craft specific policies. Asked if she was opposed to the money following the students, she replied, “I’m not opposed to parents having the ability to spend their taxpayer dollars on the best education possible for their kids.”

https://talkbusiness.net/2023/01/state-of-the-state-2023-school-choice-other-changes-to-follow-pandemics-disruptions/

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State of the State Mid-2022: Schools providing more workforce skills, less virtual instruction

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What’s the state of Arkansas education as a new academic year nears? Schools are emphasizing workforce education opportunities, offering mostly in-person instruction rather than educating students remotely, and trying to be safer and more secure in the wake of the mass shooting in Uvalde, Texas.

The programs are part of an emphasis in Arkansas schools on workforce skills. The state helps fund 30 career center programs like Saline County’s, which is affiliated with Arkansas State University Three Rivers, and Fort Smith’s, which is affiliated with the University of Arkansas at Fort Smith.

When Gov. Asa Hutchinson took office in 2015, 54 school districts were not served by a program. Only one, the Piggott School District, remains, but a satellite center managed by Black River Technical College will offer manufacturing and welding starting in January. Those classes will be especially useful in a part of the state where manufacturing, particularly the steel industry, is growing.

https://talkbusiness.net/2022/07/state-of-the-state-mid-2022-schools-providing-more-workforce-skills-less-virtual-instruction/