Service Industries Keep Employment Steady in Arkansas' Capital
Pennington-Cross, Anthony, Regional Economist
The national recession of 2001 took a toll on employment in the Little Rock area, as it did in most other parts of the country. But the dent in jobs in Arkansas' capital was relatively short-lived. Credit the service industry for that.
From early 1995 to March 2001 (the official starting point of the recession), total nonfarm employment in the Little Rock-North Little Rock metro area (Little Rock) steadily rose for a total increase of 11.8 percent.' From March 2001 through December 2004, long after the recession officially ended, employment in Little Rock had increased by 0.2 percent.
As shown in the figure, the most prominent feature of the employment pattern for Little Rock has been the full recovery from the employment losses during the recession. For example, from the beginning to the nadir of the recession, employment in Little Rock dropped 2.2 percent. Other metropolitan areas in the Eighth District fared similarly: In Memphis, employment dropped 1.5 percent, and in St. Louis, 2.5 percent. However, Little Rock bounced back more than Memphis and St. Louis. From the lowest level of employment to the end of 2004, Memphis'employment grew 1.4 percent and St. Louis' grew 1.0 percent, while Little Rock's rose 2.5 percent.
The fact that employment in Little Rock has recovered well from the recession is noteworthy in large part because of the concurrent and persistent decline in manufacturing. Over the past 10 years, manufacturing employment has declined more than 30 percent; the majority (64 percent of the total change) of the losses occurring from the beginning of 2000 through the end of 2003. Other goods-producing sectors were also declining or stagnant even before the recession. (Somewhat encouragingly, manufacturing employment stabilized during 2004, although it still accounts for only 7.7 percent of total nonfarm employment, compared with 10.8 percent for the United States as a whole.)
What offset the loss in manufacturing? Service industries. They account for almost 86.9 percent of total nonfarm employment. But not all service industries have fared equally well during the expansion, the recession or the recovery. In particular, employment in the information sector, which includes publishing, broadcasting and telecommunications firms, helped lead the expansion and the recovery from the recession but declined during the last half of 2004. …