The Fort Smith regional economy continued to send a mixed message in December, according to the report released Feb. 1 by the Center for Business Research and Economic Development at the University of Arkansas - Fort Smith.
The Monthly Economic Indicators Index report for December revealed another lackluster performance for the area economy. However, there were pockets within the economy that continued to improve.
The latest numbers indicate that residential construction activity continued to show year-over-year improvements in December, as did auto sales and overall jobs numbers. However, retail sales, home sales and airport traffic counts were all lower relative to a year ago. December home sales for the five-county Fort Smith Metropolitan Statistical Area (MSA) were down nearly seven percent. Retail sales were also down in the latest data (November), dropping 3.3 percent year-over-year.
CBRED director Dr. Kermit Kuehn of Fort Smith said retail sales were lower in December after dropping nearly two percent in November, but he noted that year-to-date sales were still running slightly ahead of 2011.
“A troubling trend is beginning to emerge here as retail sales have dropped three of the last four months when compared with last year’s activity,” Kuehn said.
The report revealed that residential construction permit activity registered significant gains over last year with 32 permits pulled in December, nearly double 2011 for the same period. Construction permits year-to-date are up 7.3 percent relative to this time in 2011.
According to the report, the overall non-farm employment for the Fort Smith MSA of 110,200 people employed reflected 300 more jobs in the MSA than what was reported a year ago.
For the seventh month in a row, the manufacturing sector recorded year-over-year improvement in headcounts for December, up 300 jobs. Trade, transportation and utilities sector also showed improvement for the month, adding 500 jobs. Leisure and hospitality added 100 jobs, according to the report.
The unemployment rate was 8.1 percent in December, a decline of four-tenths of one percent from a year ago. The jobs picture continues to be sluggish, however, as four of the nine sectors reported lower numbers than a year ago and two sectors were unchanged.
Kuehn pointed out that the improvement in the year-over-year unemployment rate to 8.1 percent was a result of a steeper rate of decline in the number of people estimated to be in the labor force while the number of unemployed dropped only slightly.
“I’m encouraged by the manufacturing sector’s string of positive numbers in recent months as these will begin to positively affect other sectors and general consumption in the months ahead,” Kuehn added.