For the first time in more than two years, monthly enplanements posted a decline at the Northwest Arkansas Regional Airport (XNA), with enplanements also seeing a March decline at the Fort Smith Regional Airport. However, both airports have positive traffic for the first quarter.

Enplanements at XNA totaled 139,434 for the first quarter of 2015, up 4.22% compared to the same period in 2014. XNA ended 2014 with 640,537 enplanements, up 10.15% over 2013, and more than the record of 598,886 enplanements in 2007. The 2014 gain also marked the third consecutive year of increased traffic at the airport.

XNA had 43,708 enplanements in March, down a scant 0.058% compared to March 2014.

The airport is served by five airlines that provide connections to 10 U.S. cities. XNA’s first full year of traffic was 1999, and the airport posted eight consecutive years of enplanement gains before seeing a decline in 2008.

Enplanements at the Fort Smith Regional Airport total 20,911 for the first quarter of 2015, up 1.05% compared to the same period in 2014. Enplanements at Fort Smith totaled 92,869 in 2014, up 9.87% compared to 2013.

March enplanements at Fort Smith totaled 7,502, up 2.03% from March 2014. The airport offers flights to Atlanta and Dallas-Fort Worth through Delta and American Airlines.

The Bill & Hillary Clinton National Airport in Little Rock posted enplanements of 130,598 for the first two months of 2015, down 8.74% compared to the same period in 2015. (The airport did not have March enplanement data as of April 27.) The airport was the only one of Arkansas’ largest commercial airports to not post an enplanement increase in 2014. Enplanements in 2014 totaled 1.038 million, down 4.32% compared to 2013.

NATIONAL TRENDS, ESTIMATES
The most recent federal data – U.S. Department of Transportation – show 769.868 million enplanements in the top 100 U.S. airports between February 2014 and January 2015, up 2.76% compared to the same period in 2013-2014.

Moody’s reported in December 2014 that enplanement growth would continue into 2015.

“More seat capacity on US airlines, combined with continued growth in the US economy, will push enplanement growth between 3% and 4% this year and in 2015, exceeding our previous expectation of up to 2% growth in 2014,” Moody’s noted in a report on airport bonds.

Airlines for America, the trade association for most of the major airlines, predicts Spring 2015 travel will rise to its highest mark in seven years. The group says approximately 134.8 million passengers – 2.2 million per day – are expected to fly on U.S. airlines during March and April compared to 132.2 million passengers in 2014, a 2% per day increase.

ENPLANEMENT HISTORY (Fort Smith Regional Airport, since 2000)
2014: 92,869
2013: 84,520
2012: 86,653
2011: 86,234
2010: 86,129
2009: 78,432
2008: 87,030
2007: 99,127
2006: 94,717
2005: 102,607
2004: 92,928
2003: 90,493
2002: 87,944
2001: 95,419
2000: 104,182

ENPLANEMENT HISTORY (Northwest Arkansas Regional Airport, since 2000)
2014: 640,537
2013: 581,487
2012: 565,045
2011: 562,747
2010: 570,625
2009: 540,918
2008: 571,845
2007: 598,886
2006: 586,320
2005: 583,940
2004: 511,714
2003: 448,228
2002: 400,063
2001: 374,122
2000: 367,157

Amidst a backdrop described by several podium speakers as a religious revival, Central Arkansas’ startup community held a celebration on Monday (April 27) to announce a major grant that will spark more activity in the state’s entrepreneurial ecosystem.

Winrock International CEO Rodney Ferguson stepped to the stage and said, “I’m not a Baptist preacher, but it sure feels like a revival here today.”

The Arkansas Regional Innovation Hub announced a $1 million grant from the U.S. Economic Development Administration to complete the development of its Innovation Center in the Argenta district of downtown North Little Rock. The Innovation Hub offers maker and collaboration space to encourage more entrepreneurship and startup activity in Central Arkansas.

The $1 million grant was provided at a press conference that included U.S. Deputy Assistant Secretary of Commerce for Economic Development Matt Erskine, Gov. Asa Hutchinson, U.S. Rep. French Hill, Delta Regional Authority Co-Chairman Chris Masingill, Pulaski County Judge Barry Hyde, and North Little Rock Mayor Joe Smith.

“The U.S. Economic Development Administration is focused on helping communities like North Little Rock capitalize on our nation’s innovative spirit to create the next generation of businesses,” said Erskine. “EDA’s $1 million investment will help to redevelop a 1920’s-era building to serve as the Argenta Innovation Center, which will provide critical education, training, prototyping, and startup training to boost entrepreneurial opportunities in Arkansans.”

“We are tremendously grateful for this support from the U.S. Economic Development Administration,” said Warwick Sabin, dxecutive director of the Arkansas Regional Innovation Hub. “This grant demonstrates confidence in the model that we have created to support entrepreneurship, and it establishes Arkansas as a center for innovative programming in talent and enterprise development.”

A portion of the grant will be used to complete the final phase of renovations of the Innovation Center, which will include The Silver Mine, an entrepreneurship resource center for co-working, startup acceleration, and other programming to support new and growing business enterprises. The rest of the funds will be used to purchase the building for the Innovation Hub.

The Innovation Center is home to three other programs:
• The Launch Pad, a maker space with cutting-edge equipment and technology;
• The STEAM Lab, a classroom and laboratory space for science, technology, engineering, and math pursuits; and
• The Art Connection, a program for high-school students that develops leadership and innovation through the visual arts.

“You can feel the momentum building in Arkansas,” said Hutchinson. “With projects like the Innovation Hub, we will continue to establish the state as a place that values innovative thinking and acts as a magnet for fast-growth business enterprises. When it comes to entrepreneurial opportunities, creative thinkers will love Arkansas.”

“I am pleased to see this public-private cooperation to facilitate innovation and entrepreneurship in our region,” said U.S. Rep. French Hill, R-Little Rock. “More start-up businesses will enhance the long-run diversity and dynamism of Little Rock.”

On Wednesday, the Innovation Hub will co-host the inaugural Arkansas Manufacturing Innovation Summit, as well as the first-ever Maker Faire in Central Arkansas.

The first quarter of tax collection reports delivered welcome news for Fort Smith City Directors and city staff who needed a bump in revenue to stabilize the city’s more than $42 million general fund budget.

The city has in the first three reporting months of 2015 collected $5.236 million on its 1% street tax program and the same amount on a 1% tax divided between bonds, Fire Department and the city’s Parks Department. The amount is up 5.22% compared to the same reporting period in 2014, and is 6.07% above the budget estimate.

The city’s 1% street tax program collected $1.634 million in the March report, essentially unchanged compared to March 2014. (Because the state of Arkansas has a two-month delay in reporting collections back to the cities, the city of Fort Smith — for budgeting purposes — has historically reflected the collections on a one-month delay. Which is to say, the tax collections remitted to cities in April are from taxes collected in February and transferred by merchants to the state in March.)

Collections during 2014 of the Fort Smith’s 1% sales tax for the street program topped $20 million for the first time since 2008. The 1% tax generated $20.099 million for the January-December reporting period, up 3.24% over 2013, and was above the budget estimate by 0.78%. However, collections for the past five years have been inconsistent. Revenue from the city’s street tax was down 0.87% in 2010, up 3.9% in 2011, up 1.36% in 2012, and down 0.69% in 2013.

The city’s portion of the countywide 1% sales tax generated $1.255 million in the March 2015 report, down 2.95% compared to March 2014, and up 2.66% below budget estimates. For the first reporting quarter of the year, the city’s portion of the countywide tax revenue is $4.014 million, up 3.54% compared to the same period in 2014. The revenue for the first two months is also 3.84% above the budget estimate.

Countywide tax collections are critical because they fund a majority of essential services within the city’s general fund budget.

LOWER FUEL COSTS AND CONSUMER SPENDING
Reduced spending on fuel could be driving more consumer spending in the Fort Smith area. Economists have said lower fuel prices are likely to fuel an uptick in consumer spending. With crude oil prices expected to remain below $60 a barrel for the remainder of 2015, the average U.S. household will spend about $700 less on gasoline in 2015 compared with 2014 as annual motor fuel expenditures are on track to fall to their lowest level in 11 years, the U.S. Energy Information Administration (EIA) said in its most recent short-term forecast.

The EIA said average household spending in 2015 is estimated to be $1,817, down from $2,513 in 2014. The federal agency estimates the 2016 spending will increase to $2,058.

“Between 2003 and 2008, average annual household expenditures on gasoline rose steadily by about 15% per year, to $2,715 in 2008. The economic recession in 2009 resulted in a 27% drop in gasoline expenditures, with both lower prices and reduced consumption. Since then, gasoline expenditures rose through 2012 and fell in both 2013 and 2014,” the EIA noted in its April 10 report.

PREVIOUS ANNUAL COLLECTION INFO
Fort Smith 2% sales tax collection (1% for streets; 1% for water/sewer bonds)
2014: $40.198 million
2013: $38.938 million
2012: $39.210 million
2011: $38.683 million
2010: $37.229 million
2009: $37.554 million
2008: $41.226 million
2007: $37.858 million
2006: $36.840 million

Fort Smith portion of 1% countywide sales tax
2014: $15.625 million
2013: $15.353 million
2012: $15.279 million
2011: $15.15 million
2010: $14.89 million
2009: $15.04 million
2008: $16.61 million
2007: $15.15 million
2006: $14.71 million

The number of related-party transactions among execs and board members with Wal-Mart Stores continues to be higher than its competitors such as Costco and Kroger, according to recent Proxy filings with the federal Securities and Exchange Commission.

Corporate compliance experts say companies that began as family enterprises often take time to thin out the family ties within the board of directors and top management teams. It’s been nearly 53 years since Sam Walton first opened Wal-Mart Stores but family ties remain deep in the retailer’s board of directors and is also spreading wider between CEO Doug McMillon, executive vice president Rollin Ford and former CEO Mike Duke who, like McMillon, is also a company director.

A recent Wal-Mart proxy filing details nearly a dozen related party transactions between its board of directors and corporate officers/executives, which by law must be disclosed to shareholders.

One long-term related party transaction is between the Walton Family, specifically, Jim, Rob and the John T. Walton Estate who are owners of Arvest Bank and Wal-Mart, to which the Walton Family owns roughly 50%. The banking group leases space inside Wal-Mart Stores for branch operations paying the retailer about $500,000 annually in rent.

One other longtime relationship noted in the proxy is between the University of Arkansas and Wal-Mart Stores. Each year the retailer leases space at the UA to conduct its annual shareholder meetings, events as well as academic studies throughout the year. Last year Wal-Mart paid the university $1.5 million, including $900,000 for the use of facilities in connection shareholders’ meeting,

The family connection to the University of Arkansas is that UA Chancellor Dr. David Gearhart is the brother of Jeffrey Gearhart, an executive officer at Wal-Mart Stores. Chancellor Gearhart is slated to retire in July. Wal-Mart said it will in fiscal 2016 continue to use UA facilities for similar events and pay the university for studies and programs.

TIES TO MCMILLON
CEO McMillon has close ties to three family members who also work at Wal-Mart or for a supplier to the retailer, according to the proxy filing.

McMillon’s sister, Lori Haynie, is an executive officer at Mahco Inc. Last year Wal-Mart paid Mahco and its subsidiaries about $19.3 million in connection with sporting goods purchases and related products. The retailer expects to make similar purchases from Mahco this year.

McMillon’s brother and sister-in-law each work at Wal-Mart Stores, according to the proxy filing. His brother-in-law Greg Bray is a senior director in the finance department, earning roughly $182,900 in salary last year. Bray’s benefits are worth $108,400 which included 651 shares of restricted stock. He joined Wal-Mart in 2002.

Nichole Bray, sister-in-law to McMillon, is a senior manager in the company’s Information Systems Division, For fiscal 2015, Wal-Mart paid her a salary of approximately $126,800 with benefits worth $75,100.

DUKE,ROLLIN FORD CONNECTIONS
Director Mike Duke’s son-in-law, Stephen Weber, is a senior manager in Wal-Mart’s Information Systems Division earning a salary of $128,600, with benefits worth another $49,700.

Brittney Duke, a senior director in Wal-Mart’s Marketing department is the daughter of Mike Duke. She was hired by Wal-Mart on Feb. 1 from Saatchi & Saatchi X at a salary of $120,000. Wal-Mart expects she will receive compensation and other benefits in excess of $120,000 from the company in fiscal 2016

Rollin Ford, a chief administrative officer at Wal-Mart Stores, has three family members who also work for the retail giant.

Timothy Togami is a senior director in Wal-Mart’s Human Resources department and is the brother-in-law of Ford, according to the filing. For fiscal 2015, Wal-Mart paid
Togami a salary of $179,700, with another $106,800 in benefits.

Ford’s daughter, Jessica Ford Salmon, is a senior manager at Sam’s Club. For fiscal 2015, Wal-Mart paid her a salary of $94,500 with benefits of $29,700. 

Brian Salmon is a senior buyer at Wal-Mart, and also the son-in- law of Ford. For fiscal 2015, Wal-Mart paid Salmon a salary of $85,400, with benefits worth another $42,600.

COMPARATIVE CONNECTIONS
The City Wire looked at competitor data for Kroger and Costco and found the related-party transactions there to be far less.

At Costco there was just one instance of a director’s family member being directly employed by the company. Executive Dennis Zook’s son was employed by the retailer in 2014 at a salary of $148,200, also earning a bonus of $36,147 and a grant of 2,340 shares of stock.

There were no such family references made by Kroger. The grocery giant did reference $10 million in purchases from Staples whose CEO Ronald Sargent is also a board member at Kroger. 

Alan Ellstrand, a corporate governance expert at the University of Arkansas, said he was somewhat surprised at the number of family tie relationships at Wal-Mart compared to competitors.

“Perhaps it relates to the unique corporate culture at Wal-Mart, who has always done business with those it knows. This is also in keeping with the regional culture. It’s always been part of the Wal-Mart DNA to keep things close to the vest,” Ellstrand said.

He said while the number of related parties are greater at Wal-Mart than other companies, so is the overall size difference. 

“I really don’t see that there has ever been any negative consequences of Wal-Mart hiring those it knows. Early on Sam Walton did the same thing,” Allstrand said.

Looking at other companies in the region like J.B. Hunt Transport, there are very few, if any instances of related party transactions pertaining to directors’ families. 

Bryan Hunt, son of founders J.B. and Johnelle is a director, but has never worked in an executive position within the trucking firm. Instead he operates auto dealerships and auctions. There are no related party transactions involving his business interests.

Fayetteville-based Clark Partners Realty Group announced new safety guildelines for its agents in response to last year’s murder of Arkansas Realtor Beverly Carter.

Effective immediately the firm’s agents will no longer be permitted to conduct an initial meeting with prospective home buyers at a property for sale. Agents will be required to meet buyers at the firm’s office in downtown Fayetteville or at a public meeting spot where the agent will obtain a photo of the individual’s identification to be emailed or text messaged to the office or broker as a safety precaution.
 
In addition to in-house policy changes, Clark Partners Realty Group will also establish an “open door” policy for agents affiliated with other firms. Realtor members will be welcome to use CPRG’s conference room to meet with a prospective buyer for the first time during regular business hours. Additionally, the firm’s staff will offer the service of photocopying the buyer’s identification to create a record for the guest agent.
 
“If an agent that works out of a Rogers office is showing property in Fayetteville it’s understandable that he or she might have a difficult time convincing the consumer that it’s worth the trip to Rogers for that very first meeting. This ‘open door’ policy is meant to eliminate that inconvenience,” said Anthony Clark, the firm’s principal broker. CPRG will actively encourage other firms, title companies, and banks to adopt similar “open door” policies to create environments across Northwest Arkansas where Realtors can feel safe.

Tyson Foods will eliminate the use of human antibiotics in its U.S. chicken flocks by the end of 2017. Tyson is a major supplier to McDonald’s who declared similar goals earlier this year under consumer pressures and growing industry debate about antibiotic use.

Springdale-based Tyson Foods is one of the largest suppliers of meat protein in the world with the No. 1 marketshare for chicken in the U.S. Tyson CEO Donnie Smith said Tuesday (April 28) that addressing antibiotic use is something Tyson has worked toward for several years.

“Antibiotic resistant infections are a global health concern,” Smith said. “We’re confident our meat and poultry products are safe, but want to do our part to responsibly reduce human antibiotics on the farm so these medicines can continue working when they’re needed to treat illness.”

Tyson has reduced antibiotics in its chicken operations since 2011. Last year Tyson Foods stopped using antibiotics in its 35 hatcheries for broilers. Tyson said any antibiotic used on farms requires a veterinary prescription and human grade antibiotic use has been reduced more than 84% during the past four years.

“Given the progress we’ve already made reducing antibiotics in our broilers, we believe it’s realistic to shoot for zero by the end of our 2017 fiscal year. But we won’t jeopardize animal well-being just to get there. We’ll use the best available treatments to keep our chickens healthy, under veterinary supervision,” Smith said.

Tyson Foods is also forming working groups with independent farmers and others in the company’s beef, pork and turkey supply chains to discuss ways to reduce the use of human antibiotics on cattle, hog and turkey farms. Those groups will begin meeting this summer.

The poultry industry has long claimed that antibiotic use is necessary at times to treat and prevent disease within flocks. The debate emerged in recent years as health advocate groups became concerned that prolonged use of antibiotics in animal production could promote antibiotic resistance in humans. The discussion which was first centered around environmental groups has spread to the Center for Disease Control in more recent years.

The National Resources Defense Council reports that 80% of all antibiotics sold in the U.S. are used on cattle, pigs, poultry and other livestock, the vast majority to speed up growth and compensate for crowded, and often unsanitary conditions.

The Center for Disease Control brought more focus to antibiotic resistance risks in its 2013 report, “Antibiotic Resistance Threats.”

“Up to half of antibiotic use in humans and much of antibiotic use in animals is unnecessary and inappropriate and makes everyone less safe,” the CDC noted.

Jonathan Kaplan of the NRDC said the poultry industry has relied on a loophole in Food and Drug Administration guidelines that allows for medically important antibiotics to prevent disease with no real limit on how much or how often the drugs are administered. He said McDonald’s recent move to phase out the use of medically important antibiotics over the next two years will ripple through the industry. Tyson Foods and Simmons Foods both supported McDonald’s recent commitment, telling The City Wire they were already working toward the goal within their own operations.

Animal welfare has long been part of the discussion among animal growers who now treat and then cull any birds that have received human-grade antibiotics. Those culled birds are not sold to McDonald’s or other customers requiring no-human antibiotics.

Ionophores, which are technically antibiotics, can be used in the chicken supply, because there is little evidence they contribute to the problem of antibiotic resistance in humans, Kaplan said.

“One of our core values is to serve as responsible stewards of animals – we will not let sick animals suffer,” Smith said. “We believe it’s our responsibility to help drive action towards sustainable solutions to this challenge by working with our chicken, turkey, beef and pork supply chains.”  

Tyson Foods’ international business is taking similar measures on antibiotic use in its global chicken operations but has not set a timeframe. Smith said today’s announcement will not materially affect the company’s financial performance.

The old saying “spring is bursting out all over” might seem to apply to Northwest Health System as the hospital expands its clinical presence in Rogers, suburban Springdale and Fayetteville as well as a facelift underway at Willow Creek Women’s Hospital in Johnson.

The system is poised to spend about $3 million to expand its neonatal intensive care unit at Northwest Medical Center in Bentonville and a major remodel at Willow Creek. Northwest Health employed 1,800 workers in 2014 and added 32 employees with the clinic expansion. More jobs will open up as new physicians come on board throughout the year and additional support employees are hired, said Sharif Omar, CEO for the system.

“The goal is to provide patients with access to primary care so they don’t have to go to the emergency room,” Omar said.

He joined Northwest about 10 months ago, bringing over 15 years of hospital management experience to the region. He is a Louisiana native and earned a bachelor’s degree in biology and a master’s degree in health administration from Tulane University. 

Omar said he’s committed to patient care. He spent five days on the roof of the Tulane hospital in New Orleans with patients in the aftermath of Hurricane Katrina.

The local system boasts just under 500 beds at its hospitals in Bentonville and Springdale. The system is under the umbrella of Franklin, Tenn.-based Community Health Systems. CHS, a publicly traded company (NYSE: CYH), also owns Sparks Health System in Fort Smith, and operates Sparks Medical Center – Van Buren.

PRIMARY CARE
“Health care is not cheap,” Omar said. “We want to provide better management of patient care to keep patients out of the emergency rooms.”

One of the new models for health care is a system aligned with primary care facilities that stretch across a region and into the rural areas to provide more local access where populations reside. A new clinic opened late last year on Wedington Drive in west Fayetteville while the Pinnacle-Rogers clinic has been renovated to accommodate more doctors during extended hours of operation.

“We’re clearing ground for the new Elm Springs location,” he said.

The new clinic will offer primary care and urgent care services. It is under construction on Elm Springs Road, near Wal-Mart and Macadoodles, west of Interstate 49 and will replace the nearby clinic. The Elm Springs location is expected to open in early January, depending on the weather.  The new clinic hours will range 8 a.m. to 8 p.m.

“We’re growing our footprint,” Omar said, noting a new pain management physician has joined the staff and a new pediatrician is on board to extend the hours of operation to 11 p.m. at the Children’s Clinic at Har-Ber Meadows in Springdale. 

WOMEN’S HEALTH
The renovation at Willow Creek is expected to last throughout most of this year as patients rooms are renovated with new furniture and a new food service agenda so that each meal is prepared specific to a patient’s needs and request, Omar said. The exterior of the hospital also will be updated. The total cost of the package is about $1.5 million.

Willow Creek is described on the system’s website as a 64-bed full service facility dedicated solely to women’s health needs, offering everything from obstetrics to a Level III Neonatal Intensive Care Unit (NICU) and maternal-fetal medicine for high risk pregnancies as well as the first three-dimensional mammography technology in Northwest Arkansas.

“Willow Creek has been the jewel in the region” in terms of the services and staffing there to support pregnant women, Omar said. “No one can do it better than us,” he added.

In a general hospital setting, new moms enter through the emergency rooms before being sent to the obstetrics unit for delivery, he said. That doesn’t happen at Willow Creek where 97% of patients are pregnant. At Willow Creek, the maternity ward is front and center because it’s the major component of care provided at that facility. 

Northwest Health said it makes a significant contribution to Arkansas’ population growth because 10% of all babies born in Arkansas occur at Bentonville and Willow Creek hospitals, according to hospital statistics. 

The hospital also boasts the only fetal physician in the area to serve high-risk moms. And, the hospital offers a NICU graduate program to follow a baby’s progress for two years once he or she leaves the NICU. It’s like a one-stop shop for unique situations, according to Omar.

BENTONVILLE EXPANSION
Northwest Medical Center in Bentonville is adding six new beds to its NICU, under the direction of Willow Creek, because of the expanding needs of new moms.

The Bentonville facility also offers an orthopedic unit where an orthopedic spine surgeon will join the staff in September. Other new physicians, specializing in endocrinology and rheumatology and behavior health (mental health), are set to join the system this year. 

Bentonville’s Northwest facility is a 128-bed acute care services with cardiac care; maternity suites with home-like setting; and a rehabilitation program for joint, muscle and bone injuries, according to the website.

The hospital also works with school districts and offers a one-call transfer system for transporting patients from rural areas in need of critical care. 

SPRINGDALE BASE
The main hospital facility has 222 beds and has served the Springdale community with acute care services for more than 50 years. The hospital was the first in Arkansas to offer minimally invasive robotic-assisted surgery and the first in the state to perform an open-heart surgery, according to its website. 

This flagship base underwent a $12 million facelift in 2012 which included moving the hospital entrance so it faces Thompson Street (U.S. 71) with 200 new parking spaces and a fountain entrance out front. The building expansion/renovation also nearly doubled the number of emergency exam rooms adding about 30,000 square feet in order to provide faster service. The added space allows for 10,000 additional patient visits a year, according to Patricia Driscoll, spokeswoman for Northwest Health System.

Additional space that was included in the $12 million expansion resulted in three more exam rooms, a trauma room waiting area and admitting services in the emergency department. An additional waiting room and lobby were also added in the hospital’s new main entrance.

Access is also a focus of the hospital.

“We need to make it convenient for consumers rather than having our clinics open from 8 a.m. to 5 p.m. when people are at work,” he said. “Primary care is the key. Education of the public will take time, essentially by the ones, one person at a time.”

Wal-Mart Stores does more than just sell stuff. Economic and social initiatives – often interwined – are a big part of the global retailer’s business model and public image. Sourcing more U.S. made products, empowering women, and putting veterans back to work, are just a few of programs pushed from Bentonville.

The company released on April 22 a 137-page Global Sustainability Report which provided some color on the progress it’s making in those three areas.

RESHORING MANUFACTURING JOBS
Wal-Mart’s efforts to source $250 billion in products supporting U.S. jobs over 10 years has been a high-profile initiative. The retailer said it is on target to reach its commitment by 2023. From light bulbs, to towels, patio furniture to toys, Wal-Mart said suppliers are expanding manufacturing and assembly in the U.S. 

Infant pacifiers manufactured by NUK are being made in Reedsburg, Wisc. The company onshored some of its European production last year. Nuk said it assembled baby products in the U.S. since 1949. With the Wal-Mart commitment, the company said it was able to expand its U.S. manufacturing footprint to give customers the option of  “Made in the U.S.” pacifiers.

The NUK move, like most of the onshoring initiatives underway, will be a gradual progression. There were about two dozen new jobs created in Reedsburg, Wisc., but more production is planned during the next year or two.

One of the largest onshoring moves was with Kent Bicycles who invested $4.3 million into a new assembly plant in Manning, S.C.

Kent CEO Arnold Kamler told The City Wire last year that it made sense for Kent to onshore some of its operations in China. Kamler said he attended Wal-Mart’s Year Beginning Meeting in Orlando in March 2013 where he met South Carolina Gov. Nikki Haley and the two discussed the idea of working together to bring some production or assembly back to the U.S.

Kent was already a supplier to Wal-Mart but found the retailer’s incentive ideal given that onshoring jobs take time and money. An estimated 50,000 bikes will roll off the assembly line in Manning this year. By the end of 2016, Kamler expects Kent to produce 500,000 bicycles which will support 175 U.S. jobs.

Wal-Mart’s decade-long commitment of $250 billion is expected to created one million U.S. jobs in manufacturing and related services, according to the Boston Consulting Group. Two years into the commitment the job creation numbers are behind the 100,000 annual average needed. Wal-Mart has not given a total tally of jobs created from its supplier commitments. However, the individual reports given thus far tally less than 10,000 jobs  created.

A report released Tuesday (April 28) by the Reshoring Initiative indicates more than 60,000 manufacturing jobs were brought to the United States by reshoring and Foreign Direct Investment (FDI) combined in 2014, representing a 400% increase since 2003. It is not clear how many of those are related to products sold at Wal-Mart.

“With only 30,000 to 50,000 jobs being offshored to other countries in 2014, the resulting net gain of 10,000 or more jobs per year represents a shift in the right direction,” said Harry Moser, founder of Reshoring Initiative.

Of particular interest are the reasons companies gave for reshoring and FDI. Government incentives, the skilled workforce, capitalizing on the value of a Made in USA label, and automation topped the list in 2014. At the same time, companies cited lower quality, long lead times, high freight costs and rising wages as reasons against offshoring.

The data also indicates that reshoring was strongest in the Southeast and Texas, a trend consistent with The Boston Consulting Group’s forecast for those areas to lead the way in becoming competitive with China for the manufacture of products to be sold domestically. Much of this is attributed to the trend for companies to build “green-field” factories in states with lower wages, lower taxes and right-to-work laws.

“We publish this data annually to show companies that the trend in manufacturing in the United States is to source domestically,” Moser said. “With 3 to 4 million manufacturing jobs still off shore, we see huge potential for even more growth and hope this data will motivate more companies to reevaluate their sourcing and siting decisions.”

Wal-Mart’s Manufacturing Vice President Cindy Marsiglio, recently told The City Wire that the retailer is pleased with progress it’s made on the manufacturing front in the past two years. While Marsiglio would not provide an estimated number of projects, in October 2014 she said there 150 projects in various stages.

“There are more projects in the pipeline today than ever before, from concept to commitment and everything in between,” she said.

Wal-Mart did say it expects to see more fruits from its onshoring initiative come through this year. The retailer will hold another Open Call for U.S. suppliers on July 7 at its Bentonville headquarters.

HIRING VETERANS
Hiring veterans has been a priority for Wal-Mart for many years, but more so since 2013 when then CEO BIll Simon, announced a commitment to offer a job to any eligibly discharged veterans within their first year post active duty.

Since Memorial Day 2013, Wal-Mart said it has hired more than 77,000 veterans. Also, through a $20 million philanthropic investment, Wal-Mart and the Wal-Mart Foundation are working with private and public sector organizations to support veteran reintegration.

In it’s home state of Arkansas, Wal-Mart has hired 2,207 veterans since 2013. In neighboring Texas, 10,102 veterans have taken jobs at Wal-Mart over the past two years.

WOMEN’S EMPOWERMENT
A big part of Wal-Mart’s efforts to empower women is to bring on more of them as suppliers. Since 2011, Wal-Mart said it has sourced $11.24 billion in products from women-owned businesses, including $4.16 billion in the most recent fiscal year.

“Our female customers in the U.S. have told us they’re interested in purchasing products sourced from women-owned businesses so Wal-Mart has supported WEConnect International and Women's Business Enterprise National Council (WBENC) in the creation of a Women Owned logo that can be used by certified businesses to clearly identify products and services as such,” the company noted in the report.

In 2011, Wal-Mart committed to source $20 billion from women-owned businesses by the end of 2015. The retailer said it’s $775 million ahead of its goal to date.

Wal-Mart also sought to double the sourcing of products from women-owned business in its international markets through 2016. The retailer said it has calculated the baseline spent on women-owned business in seven markets, tracked quarterly progress and began to implement strategies to grow the amount spent. In five of the markets Wal-Mart has increased annual spending among women-owned businesses more than 21% from 2012 to 2015.

A law passed in the most recent legislative session is meant to help the state attract aviation business that was flying away because of a sales tax Arkansas levied that other states didn’t.

Act 1182 by Rep. Joe Jett, D-Success, enacts a “fly away” provision exempting from taxes aircraft sales where neither the seller nor the buyer are located here.

Cheri McKelvey, vice president and co-owner of Air Resource Group, a Little Rock-based aviation company with an office in Springdale, said all of the planes she has brokered between out-of-state customers have flown to another state that did not charge the sales tax, often Kansas, to finalize the deal.

McKelvey said the absence of those planes means Arkansas companies have been missing out on performing the upgrades that follow. Moreover, the existence of the tax has made Arkansas less likely to attract aircraft transactions between out-of-state clients despite its desirable central location.

Companies and individuals often do business based on an individual state’s tax laws. Aviation is different because of the ease with which the product can be moved to take advantage of those laws, she said.

“It kind of levels the playing field for us, actually, to be able to do more for an airplane buyer or seller,” she said.

Chad Causey, executive director of the Arkansas Aerospace and Defense Alliance, said of the law, “We’re excited about it. We think it’s a big win that will have a big impact on the aerospace industry here in Arkansas.”

The aerospace industry employs about 5,400 Arkansans at 45 repair stations and 80 fixed base operations, according to the National Business Aviation Association. Arkansas aviation companies include Dassault Falcon Jet, Lockheed Martin, Triumph Group and Rose Aircraft Services.

Jett, a certified flying instructor, said the provision is revenue neutral because Arkansas wasn’t earning any sales tax revenue beforehand on the lost sales. He said the added business will raise funds for the state’s Department of Aeronautics that can be leveraged with federal grants to raise money for safety and economic development around airports.

The law also clarifies that taxes on repair parts and labor will not be levied for work done on airplanes rated with a gross takeoff weight of 12,500 pounds “or more.” The previous law covered planes that were “more than” 12,500 pounds, which meant a number of popular aircraft models were being taxed for maintenance, repair and overhaul work.

Jett said he hoped the revenue from the additional aircraft business could lead to reduced aircraft fuel taxes in the future.

After pulling back on expansion within China in recent years, Wal-Mart Stores CEO Doug McMillon announced Wednesday (April 29) plans to open 115 new stores by 2017. This expansion will expand the retail giant’s footprint by nearly one-third.

"Our aim is to become an integral part of China's economy," McMillon said at a news conference in Beijing on Wednesday. "China is a top priority."

Shanghai, Shenzhen and Wuhan are three cities tagged for new store openings over the next two years. This expansion will create more than 30,000 jobs The retailer also said it will invest $60 million remodeling more than 50 other stores in China this year. 


Doing business in China is no easy feat given a highly competitive environment. Walmart International CEO David Cheesewright said in February net sales in China declined 0.7% and comp sales were down 2.3% for the fourth quarter ending Jan. 31.

In its recent annual report Wal-Mart said it operated 411 stores in China as of Jan. 31. 


Northwest Arkansas’ labor market employed an estimated 236,693 during March, a gain of more than 13,000 jobs compared to March 2014 and, if the number stands, a new record for the metro area.

The jobless rate in the metro area during March was 4.2%, down from 4.4% in February and below the 5% in March 2014, according to figures from the U.S. Bureau of Labor Statistics. The area jobless rate has been at or below 6% for 21 consecutive months, and below 5% the previous nine months. The March numbers are subject to revision.

A massive revision of historical employment data for all U.S. metro areas was posted April 22, with the revisions clearly showing the Northwest Arkansas economy performing much better than the pre-recession period. The labor force size and number of employed in March set new records for the region.

Metro employment during March of 236,693 was above the 234,846 in February, and above the 223,613 in March 2014. The size of the Northwest Arkansas regional workforce during March was estimated at 247,112, up from the 245,592 in February, and well ahead of the 235,455 during March 2014.

Following are the revised Northwest Arkansas annual employment averages and jobless rate during the previous five years. (A lengthier jobless rate history is at the end of this report.)
2014: 227,954, 4.6%
2013: 219,788, 5.6%
2012: 219,374, 5.9%
2011: 216,661, 6.5%
2010: 212,323, 6.7%

The Northwest Arkansas annual employment average in 2006, the year before the recession, was 218,779.

All of the eight metro areas in or connected to Arkansas had jobless rate declines in March compared to March 2014, and all had jobless rate declines compared to February. During March, the lowest metro jobless rate in the state was 4.2% in Northwest Arkansas and the highest rate was 7.6% in the Pine Bluff area.

NWA METRO NUMBERS
Following are other key figures from the BLS metro report.

Unemployed persons in the region totaled 10,419 during March, down from the 10,746 during February and below the 11,842 during March 2014.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 51,600 in March, up from the 50,800 in February, and up from the 48,800 in March 2014. The sector hit record employment of 52,400 in December 2014.

The Northwest Arkansas manufacturing sector employed an estimated 27,300 in March, unchanged from February, but up from the 27,000 during March 2014. Sector employment is down 17.5% from a decade ago when March 2005 manufacturing employment in the metro area stood at 33,100. Average annual employment in the sector hit a high of 35,900 in 2000.

Employment in the region’s tourism industry was 21,900 during March, up from 21,300 in February and better than the 21,500 in March 2014. Sector employment reached a record of 22,700 in June. Employment in the regional sector is up almost 40% compared to the 15,700 employed in March 2005.

In Education & Health Services, employment was 24,900 during March, up slightly from 24,800 in February and up from 24,300 during March 2014. The sector hit a record of 25,000 in October, and held that level through November and December. The annual average employment of 24,400 during 2014 also was a record for the metro area.

In the Government sector, employment was 33,500 during March, up from 33,200 in February and up compared to 32,700 during March 2014. The sector hit an employment high of 33,600 in November.

NATIONAL NUMBERS
Unemployment rates were lower in March than a year earlier in 358 of the 372 metropolitan areas, higher in 28 areas, and unchanged in one area, noted the broad BLS report.

The U.S. unemployment rate in March was 5.5%, unchanged compared to February and down from 6.6% from a year earlier. Arkansas’ jobless rate was 5.6% in March, unchanged from February and down from 6.4% in March 2014.

Oklahoma’s jobless rate during March was 3.9%, unchanged from February, and down compared to 4.8% in March 2014. The Missouri jobless rate during March was 5.6%, up from 5.5% in February and below the 6.4% in March 2014.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
March 2015: 4.2%
Feb. 2015: 4.4%
March 2014: 5%

Fort Smith
March 2015: 5.8%
Feb. 2015: 6%
March 2014: 6.7%

Hot Springs
March 2015: 6%
Feb. 2015: 6.2%
March 2014: 6.8%

Jonesboro
March 2015: 5.2%
Feb. 2015: 5.4%
March 2014: 6.3%

Little Rock-North Little Rock-Conway
March 2015: 5.1%
Feb. 2015: 5.3%
March 2014: 5.8%

Memphis-West Memphis
March 2015: 6.5%
Feb. 2015: 7%
March 2014: 7.9%

Pine Bluff
March 2015: 7.6%
Feb. 2015: 7.9%
March 2014: 9.2%

Texarkana
March 2015: 5.2%
Feb. 2015: 5.5%
March 2014: 6.77%

NORTHWEST ARKANSAS METRO AREA HISTORY
Past annual average unemployment rates
2014: 4.6%
2013: 5.6%
2012: 5.9%
2011: 6.5%
2010: 6.7%
2009: 6.4%
2008: 4.2%
2007: 3.8%
2006: 3.5%
2005: 3.4%
2004: 3.8%
2003: 3.8%
2002: 3.4%
2001: 3.1%
2000: 3.4%

The March jobs reports for the Fort Smith metro shows a year-over-year gain in employment, but the regional employment has struggled to gain and maintain momentum in the previous five years. The number of jobs during March was almost 12,000 fewer than a pre-recession peak.

Fort Smith’s metro jobless rate was 5.8% in March, down from 6% in February, and lower than the 6.7% in March 2014, according to figures from the U.S. Bureau of Labor Statistics. March’s data is subject to revision, and a massive revision of historical employment data for all U.S. metro areas was posted April 22.

The number of employed in the Fort Smith region totaled 113,464 in March, down slightly from 113,523 in February, but better than the 110,353 employed in March 2014. The number of employed in the metro area is down 9.5% compared to the revised high of 125,426 in June 2006 – or 11,962 fewer jobs than the peak metro employment.

Following are the revised Fort Smith metro annual employment averages and jobless rate during the previous five years. (A lengthier jobless rate history is at the end of this report.)
2014: 111,588, 6.2%
2013: 111,277, 8%
2012: 113,821, 8.1%
2011: 114,160, 8.8%
2010: 115,923, 8.5%

The Fort Smith annual employment average in 2006, the year before the recession, was 122,993.

The size of the Fort Smith regional workforce during March was 120,392, down from 120,797 during February, but better than the 118,287 during March 2014. The labor force reached a revised high of 132,004 in June 2007, meaning the March workforce size is down 10.5% from the peak number.

All of the eight metro areas in or connected to Arkansas had jobless rate declines in March compared to March 2014, and all had jobless rate declines compared to February. During March, the lowest metro jobless rate in the state was 4.2% in Northwest Arkansas and the highest rate was 7.6% in the Pine Bluff area.

FORT SMITH METRO NUMBERS
Unemployed persons in the region totaled an estimated 6,928 during March, down from the 7,274 during February, and below the 7,934 during March 2014.

Jobs in the Trade, Transportation and Utilities sector — the region’s largest job sector —  totaled 22,800 in March, unchanged compared to February, and below the 23,100 during March 2014. Employment in the sector reached a high of 24,700 in December 2007.

The Fort Smith area manufacturing sector employed an estimated 18,100 in March, unchanged from February, and above the 17,900 in March 2014. Sector employment is down 34.6% from a decade ago when March 2005 manufacturing employment in the metro area stood at 27,700. Annual average monthly employment in manufacturing has fallen from 27,900 in 2005, 20,700 in 2010, and to 18,100 in 2014.

Employment in the region’s tourism industry was 8,700 during March, unchanged from February and below the 9,000 in March 2014. The sector reached an employment high of 9,300 in May and June of 2014. Annual average employment of 9,100 in 2014 was a new record for the metro sector.

In Education & Health Services, employment was 16,100 during March, up from 16,000 in February and below the 16,400 during March 2014. Employment in the sector reached a record 16,700 in October and December of 2012.

In the Government sector, employment was 18,100 during March, unchanged from February and down compared to 18,300 in March 2014.

NATIONAL NUMBERS
Unemployment rates were lower in March than a year earlier in 358 of the 372 metropolitan areas, higher in 28 areas, and unchanged in one area, noted the broad BLS report.

The U.S. unemployment rate in March was 5.5%, unchanged compared to February and down from 6.6% from a year earlier. Arkansas’ jobless rate was 5.6% in March, unchanged from February and down from 6.4% in March 2014.

Oklahoma’s jobless rate during March was 3.9%, unchanged from February, and down compared to 4.8% in March 2014. The Missouri jobless rate during March was 5.6%, up from 5.5% in February and below the 6.4% in March 2014.

ARKANSAS METRO AREAS
Fayetteville-Springdale-Rogers
March 2015: 4.2%
Feb. 2015: 4.4%
March 2014: 5%

Fort Smith
March 2015: 5.8%
Feb. 2015: 6%
March 2014: 6.7%

Hot Springs
March 2015: 6%
Feb. 2015: 6.2%
March 2014: 6.8%

Jonesboro
March 2015: 5.2%
Feb. 2015: 5.4%
March 2014: 6.3%

Little Rock-North Little Rock-Conway
March 2015: 5.1%
Feb. 2015: 5.3%
March 2014: 5.8%

Memphis-West Memphis
March 2015: 6.5%
Feb. 2015: 7%
March 2014: 7.9%

Pine Bluff
March 2015: 7.6%
Feb. 2015: 7.9%
March 2014: 9.2%

Texarkana
March 2015: 5.2%
Feb. 2015: 5.5%
March 2014: 6.77%

FORT SMITH METRO AREA HISTORY
Past annual average unemployment rates
2014: 6.2
2013: 8%
2012: 8.1%
2011: 8.8%
2010: 8.5%
2009: 8.3%
2008: 5.1%
2007: 5.2%
2006: 4.8%
2005: 4.6%
2004: 5.2%
2003: 5.6%
2002: 5%
2001: 4.4%
2000: 3.7%

Murphy Oil Corp. fell into the red during the first quarter as declining crude oil and natural gas prices cut a huge swath across the oil giant’s entire operations.

For the period ended March 31, El Dorado-based Murphy Oil reported a net loss of $14.4 million, or eight cents a share, compared with a profit of $155.3 million, or 85 cents a share, a year earlier. Revenues fell to $921.7 million, down 28% from $1.28 billion a year ago.

Income from continuing operations fell to $3.5 million, or two cents a share, from $169.3 million, or 93 cents a share, a year earlier. This year’s results included a $199.5 million after-tax gain on a 10% sale of Murphy’s assets in Malaysia.

Excluding certain nonrecurring items, the loss from continuing operations was $198 million or $1.11 a share, compared with a profit of 96 cents a share a year earlier. Wall Street analysts had expected the Arkansas oil company to report a loss of 87 cents a share on revenue of $764 million, according to Thomson Reuters.

Company officials attributed the $373.3 million decline in profits compared to a year ago to a nearly 50% decline in Brent and West Texas Intermediate benchmark crude prices and a 44% decline in the Henry Hub natural gas price.

“We continue to progress the optimization of our portfolio, reaching closure on the final phase of the sell-down of our Malaysia assets and signing a sales agreement for our remaining U.K. downstream assets. We remain focused on allocating capital and reducing operating expenditures,” Murphy CEO and President Roger Jenkins said in news release. “Looking ahead, Murphy is well-positioned with a solid balance sheet and cash positions to carry out our capital plans and evaluate opportunities that will enhance our business.”

In its U.S. exploration and production operations, Murphy said it averaged nearly 64,200 barrels of oil equivalent per day (boepd) net, essentially flat to the fourth quarter 2014.

“As planned, we have reduced our rig count in EFS to four rigs during the first quarter and we expect to stay at this level for the rest of the year,” the company said.

Overall, Murphy’s first quarter production averaged near 221,550 boepd, “slightly ahead of our guidance of 221,000 boepd.” Going forward, Murphy said it expects second quarter net production of only 97,000 boepd, and full-year production of 195,000 to 207,000 boepd on capital expenditures of $2.3 billion.

In early trading on Thursday, Murphy’s shares were up 79 cents at $49.19. The Arkansas oil giant’s shares have traded between $42.19 and $68.43 for the full year.

Arvest Bank once again received the highest ranking among its peers in both the South Central and Southwest Regions in the J.D. Power 2015 Retail Banking Satisfaction Study.

This marks the seventh time, overall and consecutively, Arvest has been recognized with a J.D. Power regional award. The bank has received a total of 12 J.D. Power awards during that span.

Arvest previously ranked highest in satisfaction with retail banking in the Southeast (2009), South Central (2010, 2012, 2013, 2014, 2015), and Southwest (2010, 2011, 2012, 2013, 2014, 2015) regions. The 2015 study was conducted with more than 80,000 banking consumers throughout 11 regions across the United States.

“To earn these rankings for the fourth year in a row in the South Central Region is truly remarkable,” said Rodney Shepard, president and CEO of Arvest Bank of Fort Smith and River Valley. “To consistently provide this level of customer service everyday directly reflects the commitment and hard work our bank associates put in every day. We are honored and thankful that our customers recognize our passion for customer satisfaction and trust us with their financial needs.”

In the South Central Region, Arvest received the highest score in five factors – fees, product offerings, facility, account information, and channel activities – analyzed by the study. The South Central Region consists of five states: Alabama, Arkansas, Louisiana, Mississippi and Tennessee.

In the Southwest Region, Arvest received the highest score in four factors: product offerings, facility, account information, and fees. The Southwest Region consists of six states: Arizona, Colorado, New Mexico, Nevada, Oklahoma and Utah.

Retailers are poised to profit handsomely in the coming days as consumers are expected to dole out $21.2 billion for dear Mom and the national holiday in her honor slated for May 10.

American families are expected to spend an average of $172.63 on mom this year, which is up almost $10 from spending last year, according to the National Retail Federation and Prosper Insights & Analytics 2015 survey. This year’s spending estimates are the highest recorded in the survey’s 12-year history.

“We’re encouraged by the positive shift we’ve seen in spending on discretionary and gift items from consumers so far this year, certainly boding well for retailers across all spectrums who are planning to promote Mother’s Day specials, including home improvement, jewelry, apparel and other specialty retailers as well as restaurants,” NRF President and CEO Matthew Shay said in a report. 

The report also shows increased spending intentions are even between those earning less than $50,000 annually and those earning more. About 17.8% of respondents earning less than $50,000 annually said they will spend more this year, compared to 17.5% of those respondents earning more.

Younger millennials (ages 18 to 24) are the largest cohort (43.7%) intending to spend more on mom this year. Older millennials (ages 25 to 33) were the second largest cohort (31.9%) with higher spending plans.

The majority of consumers (80%) will pick up a greeting card for mom this year which is expected to total $786 million. Discounters like Wal-Mart, Dollar General and Target will get a lion’s share of the greeting card sales which are why these retailers prominently display the cards near the front door this time of year.

Flowers are another favorite gift for Mother’s Day as 67.2% of consumers will spend $2.4 billion on flower bouquets this year. National grocers like Kroger and Aldi as well as regional players like Harp’s are promoting Mother’s Day gifts near their front doors with colorful potted plants such as tulips, roses, hibiscus and lilies. Wal-Mart, Lowe’s, Home Depot and other big box retailers are also hawking lower prices on annuals and perennials just in time for Mother’s Day. This competitive category is expected to take a toll on traditional florists as the survey respondents did not mention florists as a place they will shop for Mother’s Day.

Department stores are hoping to cash in as 36% of shoppers also plan on gifting apparel and clothing items to the tune of $1.9 billion, up from $1.7 billion last year. Jewelry stores are also poised to benefit from bigger spending this year. The survey found one in three consumers will purchase jewelry for their mom for a cumulative spend of $4.3 billion, this is up from $3.6 billion last year.

Another special way to treat mom is to take her out to lunch, which is what half of consumers plan to do this Mother’s Day. The survey indicates families will spend $3.8 billion on a special brunch or similar activities.

Consumers also want to help their moms with new electronics with plans to spend $1.8 billion on items like smartphones, tablets and e-readers. Spa days and personal services are also favorite gifts for about one in five respondents who will spend $1.5 billion this year, according to the survey.

An informal survey by The City Wire found most mom’s are happy just to spend time with their kids saying that’s gift enough.

“Time with my kids is far more precious than any gift. They usually take me out to lunch and give me a gift card which they know I like,” said Peggy Knight of Rogers. Kathleen Campanirio of Port Charlotte, Fla, agreed, saying that seeing her two sons which live in Massachusetts is the “best present” she can hope for.

Clint Lazenby, a retail expert with #GetOnShelf in Bentonville, said Mother’s Day spending is not just a U.S. tradition. 

“In many parts of Latin America more money is spent on Mother's Day than Christmas,” Lazenby said.

Experts say there are no set rules around the holiday.

“Mother’s Day is extremely unique and personal for millions of consumers, and families this year will look for different ways to enjoy their time with mom,” said Prosper’s 
Principal Analyst Pam Goodfellow. “While some will splurge, others will search high and low for the perfect, practical gift, knowing that she likes any gift that comes from the heart.”

Lana Flowers of Rogers, already received a wonderful gift from her daughter Lauren last week — $50,000 in annual scholarships to the University of Denver. While technically the gift was earned by her daughter Flowers said, “Now I can sleep instead of lying awake worrying about paying for college.”

New construction permit values for the region’s four largest cities were flat in the first quarter compared to a year ago. Issued permits from January through March totaled a combined $131.53 million for Bentonville Fayetteville, Rogers and Springdale, up slightly compared to $131.38 million a year ago.

The construction pace was also flat in March after values trended downward in February following a robust start to 2015 the prior month. Following is the breakdown on first quarter permit values for the cities.
• January: $50.723 million, up 10% 
• February: $41.8 million, up 27%
• March: $39.01 million, up 0.39%

Residential was the biggest part of the overall Northwest Arkansas market in March with   141 new home permits valued at $33.619 million. Even so, this segment was down from the 139 permits issued a year ago worth $35.795 million.

In the first quarter, homebuilders stayed busy with permit values totaling $85.725 million which were 65% of the total new construction permits issued in the four cities. The homebuilding pace across the region is steady with a year ago when permit values were$85.815 million.

Bentonville again led the pack with 51 new home starts in March valued at $15.95 million, compared to $10.36 million a year ago. For the full quarter, builders got new permits to start 127 new Bentonville homes with a total value of $38.75 million. Residential activity in Bentonville is up 20% from the $32.08 million in permits issued in the same quarter of 2014.

Fayetteville, the largest city of the four, showed a weaker building pace in March with just 29 new permits which were worth $5.73 million. March permit values were down 43% from a year ago. For the full quarter the city issued permits for 79 new homes for a total value of $16.3 million. Residential permit values across the city are down from $21.35 million reported a year ago.

Builders in Rogers had an active month in March with 44 new home starts and combined permit values of $7.423 million, up from 40 permits worth $8.1 million a year ago. The lower values are a result of more lower priced homes under construction compared to a year ago. 

In the first quarter, Rogers issued 109 new permits for new homes with a total value of $18.64 million, up from 79 new starts worth $14.37 million in the same quarter of last year.

Builders across Springdale were issued 17 new permits for home starts in March. Those  permits were valued at $4.498 million, down from the 29 permits worth $6.73 million issued in the year-ago period. For the first quarter Springdale issued 47 new home permits valued at $12.013 million. The construction pace in the city is down from a year ago when there were 74 new home starts with permits valued at $18.03 million. 

STEADY COMMERCIAL
While residential building is the lion’s share of the market, commercial activity has remained steady in recent months.

In the first quarter the four cities issued new commercial permits valued at $45.825 million, inching up from $45.565 million in the year-ago period. There have been several commercial projects underway in the recent quarter.

In January the largest permits was the $7.251 million for the Benton County Sunshine School in Bentonville. In Rogers, JoAnn Fabrics, Med Express and Aspen Dental had permits totaling nearly $3 million. Springdale has more than $2 million in permits for Springdale Public School construction, and Cassady Clinic. 

Commercial activity ticked higher in February with permit values of $11.41 million, led by citywide projects in Springdale, a new branch for Today’s Bank, a $4.54 million office complex on 48th Street and a new manufacturing site for Stabil Loc.

Last month the local commercial permits totaled just $5.183 million, down slightly from $5.808 million a year ago. 

Also on tap in the region is Freddy’s Frozen Custard and Steakburgers in west Fayetteville, a new Burlington Coat Factory in Rogers and Uncle Maddios Pizza in Rogers.

CONSTRUCTION JOBS
Construction employment across the nation was good in the first quarter expanding in 249 metro areas including Northwest Arkansas. The local region added 300 new construction jobs in March compared to March 2014. There were 8,600 construction-related jobs in the local metro area at the end of the first quarter, according to the U.S. Bureau of Labor Statistics.

Employment in the sector reached a high of 12,900 in June 2006 in the height of the building boom in Northwest Arkansas. That boom went bust, and less than three years later sector employment was below 9,000.

Veteran builders across the region say they are not seeing labor shortages as they tend to employ the same sub-contractors. They note that building activity has been sluggish because the snowy start to March and a wet April, but they expect steady work throughout the spring and summer months as demand for new homes continues, particularly in Bentonville and areas of Fayetteville.

While Avian Influenza dominated headlines and packer margins ran in the red in recent weeks they are not expected to put a dent in Tyson Foods’ profits. The company is set to report fiscal second quarter earnings on Monday (May 4), before the equity markets open.

The Springdale-based meat giant is expected to pocket between $292 million and $299 million in net income for the quarter ending March 31, according Wall Street analysts. These profits compare to $213 million earned in the year-ago period. The net income per share is expected to be 72 cents, up from 60 cents reported a year ago.

Combined revenues from Tyson and Hillshire Brands are expected to top $10.11 billion, up 11.9% over the $9.03 billion reported by Tyson Foods last year ahead of the merger. Tyson acquired Hillshire in an $8.5 billion deal completed in August 2014.

Shareholders of Tyson Foods have not fared so well this year with the stock price down about 1% to date. Shares of Tyson Foods closed Thursday (April 30) at $39.50, up 29 cents. The high price for the stock over the last 52-weeks is $44, and the low of $34.90 was reached June 16, 2014.

Wall Street analysts do see some upside potential in the meat company with a one-year target price of $50.25.

BIG CHICKEN
Tyson Foods chicken segment is expected to post good results despite softness in export markets relating to recent outbreaks of Avian Influenza. Analysts say despite some challenges, the overall pricing for chicken has been strong in recent months thanks to consumer demand.

Pilgrim’s Pride, a major competitor to Tyson Foods, reported earnings on Thursday (April 30) of 82 cents a share, rallying from 39 cents a year ago. Pilgrim’s CEO Bill Lovette told the media the chicken industry is running at almost full capacity and can barely stay up with demand.

The sale of Tyson’s Mexican poultry operation to Pilgrim’s has not been completed as the companies await a final decision from Mexican antitrust authorities. The company expect the deal will close in the next quarter.

Some of the issues helping support chicken prices include limited supply given an older age breeding flock and heightened food-service and consumer demand as chicken remains a value compared to beef and pork.

Stable corn and soybean prices are also helping boost margin spreads for chicken processors. Tyson expects feed costs to be $400 million less this year than last.

The U.S. Department of Agriculture has reported chicken production is growing slightly ahead of its forecasted projections, not by number of head, but by overall weights. There are more larger birds in production than smaller birds, but the industry is working to increase the smaller bird production which is now running at full capacity.

Credit Suisse analyst Robert Moskow said Tyson expects its chicken margin to be 11% for the duration of this year with solid profits in the second quarter, and building higher through the summer months.

LEANER BEEF
In the beef segment, Tyson Foods is expected to report weaker results than a year ago given that packer margins have been up and down dramatically in recent months. Tyson has held back slaughter as demand is tepid across the board for beef.

In the first quarter of 2015, which corresponds with Tyson Foods’ second quarter, beef prices increased by 13.48% and per capita consumption increased slightly (0.01%) compared to 2014 levels, according to analysts with Kansas State University.

Looking ahead, beef processing margins have improved significantly since late March. If wholesale prices start to stabilize and retail demand becomes more evident, as it should seasonally, greater packer appetite of a larger serving of feedlot cattle could easily be triggered, according to DTN livestock analyst John Harington.

PORK AND PREPARED FOODS
Tyson is expected to report decent pork results despite near negative margins off and on throughout the quarter. Analysts said Tyson runs aN efficient pork business with mostly branded products that carry higher margins. Tyson said its pork margins for the quarter should range between 6% and 8%.

The pork segment will no doubt be helped by the presence of Hillshire Brands as will the Prepared Foods segment which is smallest of the four segments at Tyson Foods.

Moskow said Tyson expects the operating margin for this combined business to be "in excess of 6%." In fiscal 2015 the company expects to realize more than $225 million of synergies from the acquisition.

He said Tyson believes the improved portfolio and innovation will partially offset increased raw material input costs. Moskow forecast a 6.5% margin for the Prepared Food segment. He said raw material costs are expected to be $140 million in the recent quarter, which could weigh down net profits a bit. Moskow believes Tyson will make up some ground in the back half of the year in this segment.

Oil prices will return to $70 a barrel by the end of the year as American production declines and inventories are drawn down, Oklahoma oilman and natural gas supporter T. Boone Pickens predicted Thursday (April 30) during a question-and-answer session at the Arkansas Trucking Association’s Annual Business Conference and Vendor Showcase in Hot Springs.

Pickens said the United States is now largely energy independent counting its 125-year supply of natural gas and its shared oil market with Canada and Mexico. Because of new drilling techniques, the United States has increased daily oil production from 4 million barrels to 9.4 million barrels, collapsing the oil price and making the United States the swing producer – and not Saudi Arabia, which is not cutting production.

But the lower oil prices have caused the number of domestic rigs in operation to be cut in half since December, and domestic inventories have reached their highest levels ever and are about to be drawn down, he said. Production is declining. As a result, oil will be $70 per barrel by the end of the year. Pickens, who is nearly 87, predicted oil prices will reach $150 per barrel in his lifetime.

Pickens made his remarks as part of a sit-down interview with Craig Harper, J.B. Hunt executive vice president and chief operating officer and ATA chairman of the board.

Pickens told Harper he remembers climbing up a sign to change the prices at a gas station as a boy in Holdenville, Okla. At its lowest, gasoline was 11.9 cents per gallon while diesel was 6 cents.

Pickens has been evangelizing for natural gas since 1988 because it’s cheaper and cleaner than oil and available abundantly domestically. He self-funded a marketing campaign, the Pickens Plan, to encourage the end of American dependence on foreign oil.

But natural gas has struggled to gain a foothold in the American transportation market. Despite the lower fuel prices, motor carriers have stuck with diesel because of the lack of a fueling infrastructure, the increased costs of natural gas vehicles, the decreased power, and carriers’ reluctance to change.

But Pickens remains optimistic about natural gas’ future. The price will remain low long after diesel prices have increased. He said the rest of the world is far behind the United States in its ability to develop natural gas as a transportation fuel. Natural gas has become the fuel of choice for waste haulers because their fleets stay close to home fueling stations. Major carriers like UPS and FedEx are making major investments in the fuel.

“To me, the fuel of the future is going to be natural gas, not diesel,” he said.

Pickens offered views on a variety of other topics.

He criticized President Obama for vetoing the Keystone Pipeline and said the administration appeared headed toward making a bad deal with Iran, though he didn’t think Iran would be able to affect global oil prices much.

He said he had never voted for a Democrat for president and predicted that Hillary Clinton will not be elected. He said the United States should create a North American energy alliance with Canada and Mexico.

Pickens said he has no plans on retiring (“I’m only 87”) and advised against anyone doing so if they are productive and enjoying their job. He made most of his money after age 68, when he left the company he founded, Mesa Petroleum, got a divorce and started the BP Capital investment firm. After that, his net worth increased from $39 million to $5 billion. He said he has paid $665 million in taxes and donated $1 billion to various charities.

Fort Smith-based ArcBest has announced a quarterly cash dividend of six cents per share payable May 29 to shareholders of record on May 15.

The company is set to report first quarter financials on Monday (May 4). Market watchers are waiting to see if the company will continue the momentum gained in 2014. ArcBest, a transportation holding company with less-than-truckload carrier ABF Freight as its largest subsidiary, reported in February full year net income of $46.177 million, up 192% compared to the $15.811 million in 2013, and a wide swing from the $7.7 million loss in 2012.

ArcBest shares (NASDAQ: ARCB) were trading up more than 80 cents in Friday afternoon trading. The share price closed Thursday at $35.70. During the past 52 weeks the share price has ranged from a $47.52 high to a $30.14 low.

The company also announced Friday that its U-Pack division received the 2015 Torch Award for Ethics from the Arkansas Better Business Bureau. The household moving service was one of four winners chosen by a panel of independent judges from over 100 entries.

"We're honored to represent the extraordinary principles that make up the Better Business Bureau ethics program," Andrew Schweizer, vice president of U-Pack, said in a statement. "We value the feedback we receive from customers via the BBB and will continue to utilize that source as a measurement of quality."

A gathering of 90 businesses and organizations based or active in the Fort Smith metro area participated Friday (May 1) in the “Path To Progress,” a business expo and job fair hosted by the Fort Smith Regional Chamber of Commerce.

O.K. Foods was the presenting sponsor of the event.

The day began with a First Friday Breakfast address by Mike Malone, CEO of the Northwest Arkansas Council. Malone spoke about the socio-economic benefits of the Razorback Regional Greenway, a 36-mile multi-used paved trail system that connects Bentonville, Fayetteville, Johnson, Lowell, Rogers and Springdale. It provides access to major destinations including schools, shopping centers, hospitals, parks, churches, and the University of Arkansas.

A grand opening of the more than $30 million project is set for Saturday (May 2), with Northwest Arkansas officials and others from around the state expected to attend a day of events associated with the trail.

Malone’s speech was part of a theme with the expo that began at 8:30 a.m. after the First Friday Breakfast concluded. The expo exhibit area at the Fort Smith Convention Center included several signs promoting a “Yes” vote for trail funding in Fort Smith.

The Fort Smith Board of Directors approved Jan. 20 a May 12 election in which city voters will be asked to vote for renewal of the 1% sales tax for street, bridges and drainage improvements. Part of the ballot will also include a voter question on directing 5% of the tax collections toward the multi-use trail system. A Trails & Greenway Committee developed the plan that seeks to add 35 miles to the city’s trail system. The Fort Smith Regional Chamber of Commerce and the Fort Smith Regional Council have endorsed renewal of the tax and the 5% portion for trails and greenways.

The chamber on April 27 issued an endorsement for renewal of the street tax and the 5% for trail development.

“A connected multi-use trails system will help attract and retain skilled employees and companies while expanding the use of simple, clean transportation. Additionally, trails will improve the overall quality of life in the community by promoting a healthy lifestyle and offer low-cost recreational activities for residents,” the chamber noted in its statement.

A group opposing the 5% plan, Save Our Streets Fort Smith, argues that the city is not now able to keep up with street maintenance, and further dilution of the funding will result in long-term infrastructure problems.