Q2 2012 Little Rock, Arkansas Commercial Real Estate Economy

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Q2 2012 Little Rock, Arkansas Commercial Real Estate Economy

The Little Rock, Arkansas metro area economy isn’t growing much
according to the latest data, and the locals are pessimistic. According to
Current Employment Survey (CES) data from the U.S. Bureau of Labor
Statistics (BLS), total non-farm payroll employment increased by just
1,800 (0.5%) from July 2011 to July 2012, after having fallen by 1,500
(0.4%) over the previous 12 months. That puts job gains over two years
close to zero. Household-based data from the BLS on the number of
employed residents of the Little Rock Metropolitan Statistical Area
(MSA), including the self-employed, remains slightly more optimistic with
a reported gain of 6,640 (2.0%) year-over-year in July 2012. The labor
force increased as well, by 4,800 (1.4%).

Local commentary is more in tune with CES data. “The Creighton
Economic Forecasting Group projects declining job growth for Arkansas
throughout 2012,” Arkansas Business reported. “Job growth in the state has
slipped over the past several months. “Our recent surveys indicate that the
Arkansas’ job growth will continue to decline for the final quarter of the
year with no new net job gains…Job gains for durable goods producers
will be offset by losses for nondurable goods manufacturers. The 2012
drought will continue to restrain retail sales in the state.” CES data show a
year-over-year decrease of 600 jobs (3.0%) in Manufacturing for the Little
Rock MSA in the year to July 2012. Construction and related sectors lost
1,200 jobs (6.9%), but Wholesale Trade and Transportation and Utilities
fared somewhat better with gains of 600 (3.8%) and 300 (2.3%).

According to an Associated Press article citing the same study, business
leaders are pessimistic due to “U.S. fiscal policy, the elections, inflation,
and Europe’s economic turmoil.” Business leaders have released ads
suggesting that high taxes are driving people and businesses out of the
state, according to Arkansas Business.com, and claiming the state is not a
good place to live. “The most unfortunate thing about this particular ad
buy is that it comes at the very moment that many Arkansans are slogging
through a deep depression brought on by the disappointing—
embarrassing, even—performance of the thing they love most about our
state: the Arkansas Razorbacks,” according to this source. In any event,
Government sector employment is down by 200 jobs (0.3%) in the year to
July 2012, after a decrease of 800 (1.2%) in the previous 12 months.

Office-based sectors are also losing jobs, with year-over-year losses of 100
(0.5%) in Financial Activities and 500 (1.1%) in Professional and Business Services. Among consumer-driven sectors, on the other hand, Leisure and
Hospitality gained 1,700 jobs (5.6%) and Retail Trade increased by 300
(0.8%). Little Rock’s population growth rate has slowed to about the
national average according to Moody’s Economy.com, with an increase of
about 1.2% (8,300) in 2012 and somewhat smaller gains forecast for each
year from 2013 to 2016. The metro area’s relatively low household average
income was is up 2.9% from the second quarter of 2011 to the second
quarter of 2012, according to this source.