Arkansas Could Lead Way to Recovery

Posted: Nov 18, 2010 |

Economists are positive that Arkansas is showing signs that its economy remains strong and could actually recover from the recession more swiftly than the other states, despite still having a substantial unemployment rate.

Sales tax collections in Arkansas grew by 7.2 percent compared to the nationwide growth in the country's retail trade this year. This shows that although the state could not possibly escape the effects of the financial and economic downturn, its economy is relatively stronger to sustain the brunt of the recession.

In fact, Arkansas had posted a consistent increase in its sales tax collections for straight quarters, the recent being 0.9 percent for the third quarter. This could be a sign that Arkansas is recovering much faster than any other state in the country.

Sales activity is an important indicator of a market economy.

Homeowners in Arkansas are also relatively safer from foreclosures since property prices have remained stable. The state also ranks third in the nation for having the lowest number of foreclosures in subprime lending and has lower foreclosure incidents in other loan categories as well.

While Northern Arkansas may be showing a bit more foreclosures, still the area is known for having the lowest unemployment rate at 6.1 percent among the state's metro areas. Pine Bluff has the highest unemployment rate at 9.6 percent with Jonesboro exhibiting a 1 percent hike since the economic downturn,

The recession had cost the state some 50,000 jobs over the years but economists are expecting that these job losses will be replaced by new opportunities at least by the mid-half of 2012. This gives the state a good enough leeway to recover its ground and reclaim its growth before the country was hit by the economic recession.

Economists believe that the fact that Arkansas had always been at least 2 percent below the national unemployment rate means that it has a better chance at building and employing its work force. This could put Arkansas at the helm of the nation's march towards economic recovery.

Governor Mike Beebe recommended an increased fiscal budget for the year 2011, which is at least $110 million up from last year. Congress will convene on January to discuss the state's proposal and fiscal budget.

The Arkansas Finance Department is confident that the state will continue to exhibit growth and improvement in the coming months.

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