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Key Economic Questions for 2021 in Arkansas

By Caleb Taylor

Will next year bring better economic times or more of the same?

ACRE Scholar and UCA Assistant Professor of Economics Dr. Jeremy Horpedahl was a guest on Arkansas Week on Arkansas PBS over the weekend to discuss the future of Covid-19 and the economy for 2021. The discussion also included University of Arkansas Division of Agriculture Vice President Dr. Mark Cochran and U.S. Small Business Administration Arkansas District Director Edward Haddock. The episode aired on Friday, November 27, and Sunday, November 30.

Horpedahl said Arkansas has had overall a good recovery from the initial economic effects of Covid-19. 

However, he warned these gains are tenuous and could be relinquished if worries about the health and economic hardships of the virus worsen heading into 2021.

Horpedahl said:

The reality is the vaccine is great news and it has increased consumer confidence to some extent. It has helped the stock market in the short term, but it’s still a ways off for people to be vaccinated and for the vaccines to actually start slowing down the spread of the virus. That’s what we need to look for. To the extent that we can protect businesses in the short-term but also protect health, we have to do all the things we can do that are in that general strategy.”

Horpedahl also noted that overall consumer spending in Arkansas is about even or slightly up from where it was before the pandemic, but there’s been a big shift in the composition of this spending.

Horpedahl said:

People are still eating obviously, but they’re eating much more from grocery stores. Spending there is way up and spending in the hospitality industry is down about ten percent. We can see it in the employment numbers too. One third of the net loss in jobs since the pandemic in Arkansas have been in restaurants and bars. There’s still a long way to go. The industries that have been most negatively affected such as restaurants, travel and hospitality are probably not going to be seeing the recovery until that vaccine is widely distributed in the population.”

For more data and discussion of the effect Covid-19 has had on the Arkansas economy, check out a summary of a talk ACRE Director and UCA Associate Professor of Economics Dr. David Mitchell gave to the Conway Kiwanis Club on November 4.