Little Rock Business Leaders Cautiously Optimistic but Have Specific Concerns

Though cautiously optimistic about the local economic outlook, Little Rock-area bankers and business leaders are concerned about a lack of trained employees, higher fuel costs and significant business losses, among other issues.

The opinions were given at an Aug. 26 Little Rock Economic Forum sponsored by Federal Reserve Bank of St. Louis to discuss the state of the regional economy. 

Forum participants responded to a pre-event survey; more than 75 percent indicated that local business conditions are not as strong as they were a year ago. Nearly two-thirds said local business profits probably will not increase over the next 12 months. Nearly half thought local businesses will not maintain or increase staffing levels over the next year, and nearly two thirds do not expect businesses to boost capital spending. Despite these concerns, participants cited many new capital projects and business entries in the pre-event survey.

The Little Rock region has a diverse economy, which insulates it from the economic peaks and valleys that other regions may experience.  The commercial real estate market remains relatively strong, and the area’s health care system is a major economic engine in central Arkansas. Many cited the Fayetteville Shale Play as an economic driver, as it is creating new jobs and new business formations. The operation is offering higher wages and, in doing so, is drawing skilled workers away from the Little Rock area.

Participants expressed a number of concerns. Several participants felt the lack of a trained workforce and the need for a better education system was causing Arkansas to lose businesses to other states.  Some noted some significant business losses, and they worried about the high number of high-paying jobs that were lost with those businesses. 

Many noted higher fuel costs as a major concern, and cited it as a reason some businesses were failing. Some mentioned businesses were applying fuel surcharges, resulting in price increases. The higher fuel costs are also raising the cost of agricultural production inputs, especially in fertilizer products.

Several stated that credit is too tight, which is harming the ability of individuals and businesses to secure loans. Some said that low-income individuals are struggling and nonprofit agencies have seen an increased demand for their services.

The Federal Reserve periodically holds Economic Forums to learn more about local economies from bankers and business leaders. See the Fed’s Conferences and Events page to learn more about upcoming events.