Employment Security Department: State of the economy: Benton-Franklin communities boost yet another year of economic growth
Benton-Franklin communities remained one of the state’s most vigilant and forward-pulsating economic regions in 2018. Economic activity continued to outpace the other areas, with employment rising 3.5 percent in December 2018, on a year-to-year basis, compared to 3.0 percent statewide.
The area is expected to continue its economic growth in 2019. However, there is a caution of slowing in national consumer confidence, which is lingering on the border of the temporary consumer shock and a precursor to a significant economic slowdown. Most of the national and state consumer and labor force trends tend to impact the local population and household jobs and earnings outlook.
The two-county region hosted a growing resident labor force in 2018. This is one of the leading indicators of economic health in any area, and local labor force recorded growth over-the-year of 3.2 percent in December 2018, outpacing state’s labor force growth of 2.4 percent.
Agriculture and manufacturing industries had their ups and downs over the past couple years, but 2018 brought some stability. Agricultural employment increased in the first half of the year. Early farm activities for ground cultivation and plant preparation happened due to good weather conditions. This in turn started early increases in farm employment.
Agriculture continues to be highly volatile from year-to-year, with overall upward growth of 1.9 percent a year since 2010. According to covered employment statistics, agricultural employment increased by 6.6 percent from 2016 to 2017, with total payroll increasing by 11.0 percent. Minimum wage increases have contributed to overall wage growth in this industry, with average wages increasing by 4.1 percent.
Manufacturing was recovering from job losses in 2016 and 2017, and recorded 3.9 percent growth from December 2017 to December 2018. Average annual pay in manufacturing was $50,085 in 2017, and it is above that of total area industry average of $49,902. Increase in manufacturing average annual wage of 3.3 percent emphasizes development and increased industry demand for STEM-related workforce skills, knowledge and abilities. Moving forward, manufacturing will be one of the industries that will lead innovation in workforce skills development, along with technology development for machinery and automation.
Construction industry in the local area broke yet another record, with an over-the-year increase of 4.5 percent, bringing total employment to over 9,000 in 2018. The national and state housing sectors have expanded rapidly for the past six years. Possibilities are that rapid expansion slowed in the second part of 2018. All-transactions housing price index increased by only 3.0 percent in fourth quarter 2018, following a third quarter increase of 7.9. Median sold price in November 2018 was at $277,500 with an increase of only 0.5 percent from October, compared to 2.0 percent increase for the same time period in 2017. Median house prices increased over-the-year by 8.2 percent.
Employment growth was widespread among service-providing industries. Financial activities expended by 7.9 percent or around 300 new jobs in December 2018. Most of the employment growth in this industry has been driven by new financial institutions locating in the area, as well as local institutions expanding their services for growing population.
Trade, transportation, warehousing and utilities increased by 1,100 jobs (5.6 percent) per December 2018 estimates. This sector encompasses multiple industries that provide services to local and regional businesses and local population. From cold storage, energy production and retail trade, the region is diversifying its economic base to become a regional and state center for economic opportunities.
Private educational and healthcare services increased over-the-year by 4.4 percent. Both industries on average pay over $40,000 a year, which is great opportunity for the local workforce. Another industry of continuous expansion for the past seven years is leisure and hospitality, which expanded in December 2018 by 5.3 percent, over-the-year. The majority of growth in this super sector came from food services, as regional population and businesses grew their demand for local dinning and leisure activities.
Population in Benton and Franklin counties drove economic growth as it grew faster than in any other area in the state. As of 2017, Benton-Franklin region’s population passed 290,300 per U.S. Census estimates. Average annual growth rate for the past seven years has been at 2.2 percent in Franklin County and 1.7 percent in Benton County, compared with the state’s seven-year average growth of 1.4 percent and the nation’s 0.7 percent.
Population median age increased to 33.6 years in two-county area, but is still younger then the 37.6 years statewide. The 65 years-plus population was at 11.6 percent in 2017, compared with the state average of 15.1 percent share. A notable factor for the future workforce supply is that 29.7 percent of region’s population was under 18 in 2017, compared with the state at 22.2 percent and the nation at 22.6 percent.
Local area population growth and businesses are propelling this community forward by creating jobs and by increasing the workforce. Much of the growth in 2019 and early 2020 is expected to be in both goods-producing industries like manufacturing and construction, and service-providing industries like healthcare, education, transportation and warehousing, leisure and hospitality, retail and food services.