Sixty-five percent of business contacts in the Little Rock zone expect local economic conditions to be better or somewhat better in 2017, according to the latest Burgundy Book.
That's an increase of 17 percentage points from the same time in 2015 when contacts were asked about 2016 conditions.
The Burgundy Book is a quarterly review of economic information by the Federal Reserve Bank of St. Louis. The St. Louis district's Little Rock zone includes the majority of Arkansas, except the northeast part of the state. The population in the zone is about 2.5 million, including 710,000 who live in the Little Rock metropolitan statistical area.
This will be the final Burgundy Book. Next year, zone-specific anecdotal information will be included in a supplement to the Fed's redesigned Beige Book. The Beige Book is released eight times per year, and the next release will be Jan. 18
The zone’s unemployment rate averaged 3.9 percent in the third quarter, up slightly from a record low in the second quarter, according to the report. Jonesboro, included in a separate Memphis zone report, showed an unemployment rate of 3.4 percent.
Payroll employment growth was modest across the zone, faster than the national rate in Fayetteville but slower than the national rate in Little Rock, Fort Smith and Texarkana. Only 40 percent of contacts reported wages were higher or slightly higher year-over-year.
Employment in manufacturing continued to decrease in the third quarter, and transportation sector employment also dropped slightly.
Although single-family homes sales in Little Rock decreased during the third quarter, apartment rents have been increasing by about 2 percent. The vacancy rate has dropped to under 7 percent, with steady declines over the past four quarters.
Growth in house prices throughout the Little Rock zone has fallen behind the national average, but but, according to the Memphis zone book, Jonesboro saw single-family building permits grow at a relatively fast rate during the third quarter.
Per capita incomes in Arkansas are up 1.8 percent from one year ago, and mortgage debt balances have declined 1 percent. But the delinquency rate for automotive debt continued to increase for the Little Rock zone, reaching 3.5 percent in the third quarter, and credit card debt growth increased to triple the national rate.
In the agriculture industry, many Arkansas farmers are expected to experience another tough year because strong national row cop production is keeping prices low.