The recent economic downturn "has affected us, but not as badly as some states," says Maria Haley, director of the Arkansas Department of Economic Development. The state's constitution requires a balanced budget and prohibits deficit spending. "We are one of 10 states that are not cutting services and not raising taxes to cover any budget shortfall, so we have no budget gaps; it is pretty amazing," she says, noting that the Arkansas unemployment rate as of February was 6.6 percent, still below the national average.
Haley says the state anticipates $2.9 billion in stimulus funds from the American Recovery and Reinvestment Act of 2009. "We expect almost $50 million to go towards state energy programs, energy efficiency, and conservation block grants," she says.
In the energy sector, foreign investors are driving wind projects. Denmark-based LM Glasfiber and Netherlands-based Polymarin Composites USA and Wind Water Technologies have established the Little Rock area's reputation for advanced manufacturing in this niche. A recent wind announcement comes from Nordex USA, a German company that is currently constructing a $100 million facility in Jonesboro; when operational, it is expected to employ 700 people at an average hourly wage of $17.00.
In natural gas, Southwestern Energy Company (SEC), a natural gas exploration and production company plans a new 100,000-square-foot, $25 million regional headquarters in Conway. Alan Stubblefield, senior vice president of SEC, notes that his company's work has increased along with the growth of the Fayetteville Shale exploration and production project. He confirms that the company's mid-2010 construction completion goal is still on track barring any unforeseen factors.
In other industries, construction equipment giant Caterpillar promises 600 jobs at its new $140 million North American motor grader production facility in North Little Rock. Jim Dugan, the firm's chief corporate spokesperson, says that the project "represents an important, long-term strategic step for Caterpillar which will result in more cost-effective production," supporting the introduction of a Tier 4 compliant motor grader in 2010. He credits the state's positive business climate and a strategic logistical location as reasons Caterpillar chose the Arkansas location.
One of the state's biggest deals was the retention of 1,500 jobs and creation of an additional 250 jobs in Texarkana at Cooper Tires. Along with $2 million from Governor Mike Beebe's Quick Action Closing Fund, the company received a 6.5 percent sales tax credit for capital improvements, a 2 percent income tax credit for any new employees over the next five years, and a 5 percent rebate for 10 years of payroll for new employees.
Other growing clusters include aerospace and aviation component manufacturing - the state's largest single export - along with food processing and logistics and distribution. In March, Chicago-based Schulze and Burch Biscuit Co., a snack manufacturer, announced a new 500,000-square-foot production facility in Searcy that will eventually employ approximately 250 people.
Haley says that companies are prospecting for the future, anticipating a healing economy: "We are positioning ourselves now so that when the economy turns, we are ready."