What a difference a month makes.

After declines in April, the American Trucking Associations’ truck tonnage index and the Cass Freight Index reported gains in May. The reports from the two organizations provide a look at freight activity, which is considered an important economic bellwether.

The American Trucking Associations’ advanced seasonally adjusted Truck Tonnage Index rose 2.3% in May after falling 0.2% in April. Compared with May 2012, the index was up 6.7%, which is the largest year-over-year gain since December 2011. Year-to-date, compared with the same period in 2012, the tonnage index is up 4.5%.

“After bouncing around in a fairly tight band during the previous three months, tonnage skyrocketed in May,” ATA Chief Economist Bob Costello said in a statement.

“The 6.8% surge in new housing starts during May obviously pushed tonnage up as home construction generates a significant amount of truck tonnage,” Costello explained.

He also said the index increase was a surprise.
 
“While we heard good reports regarding freight levels during May, I have to admit I am a little surprised at the large gain in tonnage.”

Trucking serves as a barometer of the U.S. economy, representing 67% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 9.2 billion tons of freight in 2011. Motor carriers collected $603.9 billion, or 80.9% of total revenue earned by all transport modes.

The ATA report and the Cass Index provide insight into the type of economic environment faced by several large Arkansas-based transportation companies like Fort Smith-based Arkansas Best Corp. (ABF Freight System), Lowell-based J.B. Hunt Transport Services, Tontitown-based P.A.M. Transportation, and Van Buren-based USA Truck.

The Cass Freight Index for May 2013 reported at 2.9% increase in all shipments – rail, truckload, less-than-truckload, etc. – but a 0.3% drop from the May 2012 activity.

“North American shipment volume rebounded in May, while expenditures remained almost unchanged. This seems an accurate reflection of the mixed results in the freight sector and the economy overall. Unemployment is declining, yet job creation is still weak,” noted Rosalyn Wilson, a supply chain expert and senior business analyst with Vienna, Va.-based Delcan Corp., who provides economic analysis for the Cass Freight Index.

Cass uses data from $22 billion in annual freight transactions processed by its information processing division to create the Index. The data comes from a Cass client base of 350 large shippers.

Wilson said a bulk of the increase in rail shipments is the result of increase shipments of oil.

According to the Association of American Railroads, the use of Class 1 railroad cars for crude oil shipments has grown from 9,500 carloads in 2008 to almost 234,000 carloads in 2012. In the first quarter of 2013, Class 1 railroads pulled 97,135 carloads of crude oil, up 20% from the fourth quarter of 2012 and up 166% compared to the first quarter of 2012.

“With traditional rail commodities such as coal and grain faltering in recent years, petroleum shipments have ensured industry growth,” Wilson wrote.

Signs of future economic activity remain uncertain, with Wilson noting that there “are no clear signals indicating which way the economy will go for the rest of the year.” She said gains in residential construction and signs of an improving global economy are somewhat offset by a potential slowdown in the manufacturing sector.

A June 12 economic report from Wells Fargo agrees with Wilson’s assessment.

“Business investment spending, both for equipment & software as well as structures, should add to growth but at a slower pace in the current quarter. Manufacturers’ capital goods orders and shipments gains have slowed over the past three months and while that is weaker than earlier in this recovery, the gains reflect an economy in the middle of a steady expansion—not a boom, but no signal of recession either.”

They did not have to come. They chose to come after Fort Smith residents reached out and asked for help. But now there are questions about where Erin Brockovich's environmental firm has gone and why they have not been in touch with residents or media regarding the plume of trichloroethylene (TCE) she said her firm would investigate in March of this year.

The TCE plume Brockovich had said she would investigate was the result of a cleaning solvents used by Whirlpool during until the 1980s. The chemical, which is known to be cancer-causing, made its way into groundwater in the area north of the company's former manufacturing facility. Whirlpool is currently working with the Arkansas Department of Environmental Quality to find a solution to the pollution problem.

Minutes before The City Wire was prepared to publish this story on June 17, Melissa Dutcher, claiming to be working on the Brockovich group's Whirlpool investigation, sent the following e-mail:

"My name is Melissa Dutcher and I'm the Environmental Coordinator at Vititoe Law Group. I am part of the team working on the Whirlpool investigation. Mr. Bowcock has been traveling extensively the last few weeks and asked that I follow-up with you. Mr. Bowcock's testing was inconclusive because the wells were dry and there is a plan to do follow-up sampling in the next few weeks. ADEQ is scheduled to release their spring water sample results this week and we, along with everyone else, are waiting to read these. We are in the process of scheduling another community meeting near the end of June at the request of Ft. Smith residents living in the plume."

The individual Dutcher mentions in the e-mail is investigator Bob Bowcock of Integrated Resource Management, a Claremont, Calif.-based company. He, along with Brockovich, held the March 26 town hall meeting in Fort Smith with residents regarding the contamination and vowing to hold Whirlpool accountable.

"We walked around the facility, we looked at the drainage system coming off the property. We understand a little bit about what they were making there and the chemicals they were using. We walked the rail spurs and kind of looked at the topography, you know? What does the Earth look like just from the surface because that's going to tell you a lot about where these chemicals are going to go and everybody knows, who lives here, that Whirlpool's kind of in a high spot and it's headed in a northeasterly direction down to the creek," Bowcock said at the March 26 event.

Brockovich continued later in the meeting, telling residents that while they may have felt abandoned by Whirlpool, she and her crew of investigators would not leave Fort Smith high and dry.

"We're here to help you. We're going to start the process of an investigation. We've already started sampling. We're going to be back to get more samples. We're going to be in touch with you. We're going to tell you what we find out. We're going to tell you what documents we uncover. We're going to work with the employees and we will start the process of isolating where the plume is, where it isn't, who's impacted and then one of the decisions you will have to make is you will be entitled and you have the right to have your property bought, taken care of or any future damages for your health as we move forward," she said.

Bowcock also said a Facebook page would be set up to help residents communicate to the Brockovich Firm with anonymity. That was March 26. As of June 17, no Facebook page has been set up.

Several residents have told The City Wire that no contact has been made between the firm and residents. And calls from The City Wire to Bowcock and Integrated Resource Management have not been returned for at least two months, though the e-mail from Dutcher came at 5:23 p.m. after more than 50 attempts to reach Bowcock.

The last contact between The City Wire and Bowcock took place approximately three weeks after the town hall he and Brockovich hosted in Fort Smith. At the time, he said results were not available from tests conducted while he was in the area.

Since results were not yet available, he instructed The City Wire to try contacting him again about two weeks later, around the last week of April. But he did not answer calls to his cell and office numbers and did not return numerous phone calls and voicemails left by multiple representatives of The City Wire.

A woman who answered the phone at his office June 13 said, "He is very busy. He is in Colorado and he won't be back in the office until next week." She then said all calls would have to go through a press agent, declining to provide a timeline of when or if The City Wire's multiple calls over the previous two months would be returned.

Resident Debbie Keith, who initially reached out to Brockovich and was instrumental in her coming to Fort Smith, declined to comment and referred all questions to Brockovich and Bowcock, with whom she still has contact.

Travis Westpfahl, a plaintiff in a civil lawsuit against Whirlpool, is one of the residents who said he has been unable to reach anyone associated with Brockovich.

"They asked for our e-mail addresses and all of that stuff, but they never got back with us," he said.

According to Westpfahl, he attempted to contact the firm twice through their website, but to no avail. He said he could not figure out why Brockovich and her colleagues would spend time coming to Fort Smith if they were not going to follow up with residents and the media.

"It makes you wonder if there is no contact after that, why bother to come in if you're not going to do anything? …I feel like they hope it will just go away. I feel like they're hoping that they can wait and then it will go away. That's the way I kind of feel about it."

Fort Smith City Administrator Ray Gosack said he was not aware if the company has conducted independent testing in the neighborhood near the former Whirlpool manufacturing facility.

"We have had no contact from Erin Brockovich or made contact with her company," he said. "I am not aware of any testing that the Brockovich group has done."

Katherine Benenati, public outreach and assistance division chief at ADEQ, said in an e-mail that the state agency had only been in contact once with anyone associated with Brockovich.

"The discussion dealt with where we were in the process of reviewing the risk assessment plan. I don’t have the name of the caller or an exact date," Benenati said.

Gosack, recalling Brockovich's claims that she would be there for the community, said he was disappointed by her inaction and leaving residents feeling slighted.

"She even said, 'We've got your back.' That's one of the last things she told the residents during the public meeting. …It is disappointing because it was going to give residents an independent level of assurance of what was happening or not happening. They created high expectations among the residents that they were going to do an independent investigation and it appears so far that they've done nothing toward that end."

While there has been little to no communication from the Brockovich Firm to individuals contacted by The City Wire, Gosack said he was happy to report that communications between the city, ADEQ and Whirlpool had improved.

"I think that's helped the Mayor and the Board of Directors, but more importantly, it's helped the citizens. They have more access now than a year ago and that's a result of action taken by the Board of Directors."

Whirlpool submitted a revised risk management plan to ADEQ on May 21. Gosack said it is his understanding that the agency is reviewing the plan now.

"It is possible they could ask for additional information from Whirlpool or they could put it out for public comment," he said.

Westpfahl said regardless of what plan is approved by ADEQ or whether he hears back from anyone associated with Brockovich, he just wants something done about his contaminated property.

"Hopefully they'll make them clean it up. That's the main thing."

When a patient lives with a age-related emotional and mental disorder such as Alzheimer’s and other forms of dementia, the situation takes a toll on the person living with the disease and their caregivers.

The new Senior Behavioral Health Program at Mercy Hospital in Rogers will serve the “mind body and spirit” of patients age 55 and older who are living with Alzheimer’s, other forms of dementia, depression and other mental/emotional health issues, according to hospital officials.

The new program, opening next month, is on the hospital’s seventh floor and features an 18-bed unit. The public and media got a first look at the new unit Tuesday (June 18) during the ribbon cutting ceremony.

The $3.5 million dollar renovation was made possible in part from a $1 million gift from the Walmart Foundation and the remaining costs were from the Mercy Foundation as part of Mercy’s $90 million enhancement and expansion plan.

“We’re excited about the physical healing and outstanding science but also that the emotional and spiritual needs will be met,” said John Halstead, vice president of mission and ethics for Mercy Health System.

One unique aspect of the program, he said, is that the hospital setting means that patients can receive the psychiatric care they need but if there are major physical needs that arise, those can easily be addressed.

Late-life depression affects about six million Americans but only 10% of adults age 65 and older seek depression treatment, according to Mercy Health officials. Suicide rates of 16% among seniors age 65 and older are the highest among any other age demographics. But this age group only comprises about 12.4% of the total population.

Dr. Donnie Holden serves as medical director for the new program and he said the new program is a return of these types of services to Northwest Arkansas. Geriatric psychiatric services were available for a time at the old Bates Hospital, he said.

Mercy decided to create the program after the growing need for the services were expressed repeatedly during focus groups hosted last year, said Scott Street, Mercy president and CEO.

“It’s bringing to light and reality that is needed,” he said.

Holden said the dream started with the construction and now it’s moving on to a new phase as the program actually opens. Calling the unit a “state-of-the-art healing center,” Holden spoke of the various needs that will now be met through the center.

He compared the human to an equilateral triangle with one side being the person’s physical nature, one side being the mental/emotional nature and the third being their spiritual nature, including their sense of purpose.

“If you break one bond, the entire configuration is lost,” he said.

Gary Halstead is co-owner of Comfort Keepers in Bella Vista, which offers in-home care for seniors and families. He agreed the new unit is needed. Sometimes his clients will need the additional care outside of the home or sometimes patients might be in the hospital and released to in-home care later.

Gary Halstead (John Halstead’s father) said his company also meets the needs of the client’s caregiver by providing respite care and he ability to take much-needed time away to address their own health needs.

Dementia data
• 5.2 million Americans have Alzheimer’s disease.
• 200,000 people diagnosed are younger than 65.
• 33% of senior citizens die from Alzheimer’s or other dementia.

Arkansas Impact
In the year 2000, 56,000 Arkansans had been diagnosed with Alzheimer’s but by the year 2010, 60,000 Arkansans had been diagnosed. Those figures are expected to increase to at least 76,000 Arkansans being diagnosed with Alzheimer’s by 2025.

Rain is seen as a blessing from the heavens unless it keeps farmers from planting or harvesting on time.

As the rain continued to fall throughout the spring planting season, farmers from Benton County to Manila, Ark., were kept out of the fields. The same could be said across the Great Plains and into the North Central region of the country.

Matt King, economist and market analyst with Arkansas Farm Bureau, said 43% of the nation’s corn crop was planted in the same week and nearly one month behind schedule which puts almost half the crop tasseling around the end of July.

“As long as weather stays favorable with cooler nights, yields should be okay, but if the temperature heats up over the next few weeks, yields will likely be impacted. The same is true for cotton and soybeans as they are pollinating a month later than usual,” King said.

The estimates on corn acreage plantings were reduced by 30%, or 40 million bushels, because of the heavy spring rains, according to estimates from the U.S. Department of Agriculture (USDA).

King said statewide corn acreage was diverted to soybeans at the last minute because of the shorter growing cycle. And rice farmers had to resort to sowing their fields by plane, which can be challenging.

The USDA Crop Progress report released June 17 indicated farmers have come close to catching up with previous year’s numbers, but there is still more than six crucial weeks to go in this growing season.

The amount of the corn crop that has emerged at 92% was five percentage points behind the five-year average of 97% in the corn-growing states, the USDA said. There was little change in the condition of the crop with 64% rated good to excellent, compared with 63% the previous week and 63% at the same time last year.

Soybeans planted as of June 16 were 85%, lagging the five-year average of 91% by six percentage points, but emergence at 66% lagged the average of 80% a bit more significantly. The crop was deemed 64% good to excellent, up from last year’s good-to-excellent rating of 56% at the same date.

In the main winter wheat-growing states 89% of the crop was in good shape. However, there was just 11% harvested at least two weeks behind normal schedule. The percentage of the crop in good-to-excellent condition at 31% remained the same as the previous week but was well below 54% a year earlier.

Weather conditions in 2013 have been markedly different – primarily wet and cool – and areas remaining in drought comprise primarily the western edges of growing areas.

Local companies like Tyson Foods, Simmons Foods, George’s and OK Foods buy millions of bushels of corn and soybean meal to feed out their chicken flocks throughout the year. These companies keep a close eye of the grain markets at all times as feed comprises a substantial expense. It takes about 1.2 pounds of corn to produce one pound of live chicken in addition to soybean meal, the two main feed ingredients.

At the market height late last summer Tyson Foods CEO Donnie Smith said the company had about 52 cents per pound in a live bird.

King said corn prices remain volatile ranging from $4 to $7 a bushel as the impacts of global competition out of South America and vulnerable U.S. supplies have speculators dabbling in the commodity markets. He expects soybean prices will continue to feel pressure because of the acreage picked up this year.

King said the future’s market in soybeans appears to be overpriced since the better-than-expected USDA crush report. November soybean futures moved below the key $13 level this week as export inspections were disappointing, at only 2.75 million bushels.

USDA estimates the average on-farm price for 2013 production between $9.75 and $11.75, which will likely put more downward pressure on future’s pricing.

King said Arkansas farmers planted 270,000 acres of cotton this year, although it took farmers until "May 35 or May 45" to get it planted.

“There is no such thing as planting cotton in June,” King explained. “But on occasion like this year, farmers had to add days to the month of May, at least in theory.”

During the month of June, the Jones Center will be collecting nonperishable food items for the NWA Food Bank and offering an ice skating special to those who donate.  

For guests who donate food the Jones Center is offering an ice skating special for the entire month of June. The fee to skate has been reduced to $2 when patrons bring one nonperishable food item to donate to the local food bank.

Skating is normally $5 per session with a $2 skate rental fee.

The Jones Center ice skating hours are listed below:
Tuesday & Wednesday – Noon to 3 p.m.
Thursday –  Noon to 3 p.m.  and 7 to 8 p.m.
Friday –  Noon to 3 p.m. and  7 to 9:45 p.m.
Saturday – Noon to 3 p.m. and  5:15 to 9:45 p.m.
Sunday – 1:30 to 4:45 p.m.

"The NWA Food Bank is thankful for the year-round support of the Jones Center. June and July are two of the busiest months of the year for us. The timing of this food drive couldn't be more perfect," said Marge Wolf, President/CEO NWA Food Bank.

Food collection will take place at the Jones Center through June 30 at which time the items will be transported to the NWA Food Bank.

Since the great recession five years ago, food retailers and consumer packaged goods suppliers have largely relied on inflation to drive top line revenue growth, but Tuesday’s (June 18) CPI reading was a clear indication that is no longer the case.

The Consumer Price Index rose just  0.1% in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. During the last 12 months, the all items index increased 1.4% before seasonal adjustment. The food index, however, turned down in May, with the food at home index falling 0.3%.

Food retailers from Wal-Mart Stores Inc. to Costco have said lower overall inflation has dampened their top line growth in recent quarters and most analysts agree that food retail has largely become a marketshare game between a host of new players.

An annual study on the food retail sector from Willard Bishop indicates sluggish growth potential over the next three to four years as major shifts in consumer behaviors redefine winners and losers in the sector.

Wal-Mart looks more like a grocer with general merchandise these days as food makes up 55% of the company's total gross sales, rising 2% over the past two years. Grocery is important to Wal-Mart as the retailer continues to invest in price, heavily advertising its low basket costs and recently unveiling a new "fresh" campaign that includes a money-back guarantee.

Analysts with Kantar Retail and Raymond James have said Wal-Mart's grocery business is important to the company's overall success but there has never been more competition in the grocery space as even Ace Hardware is rolling out a line of consumables.

2012 MARKET RECAP
The Willard Bishop report breaks the food retail segments into traditional and nontraditional formats examining how each one fared into 2012 and then projected future growth potential by 2017.

Overall, the traditional grocery channel sales increased 3.4% to $517.7 billion in 2012. Marketshare remained steady at 46.5%.

Traditional supermarkets experienced a sales increase of 2.9%, attaining $442.6 billion in 2012. But this segment continues to lose share to non-traditional formats like dollar stores, supercenters, wholesale clubs and e-commerce.

Fresh format stores such as Fresh Market and Whole Foods continued a dramatic sales growth of 22.5% to $12.7 billion in 2012, according to the report. Whole Foods had the largest same-store sales increase at 8.7%, followed by the Fresh Market at 5.7%.

Jim Hertel, managing partner with Willard Bishop, said another player to watch in the “fresh” segment is Sprouts Farmers Market with the retailer’s recent purchase of Sunflower Farmers Market. Hertel spoke on food retailer challenges June 19 during an webcast hosted by the Food Institute.

Hertel said the “fresh” format appeals to a well educated, higher net income demographic which gives those retailers the chance for net sales growth and price insensitivity that could equal real profit potential in the short-term. He gives Whole Foods a lot of credit for thinking about a “value format” in areas with more modest incomes.

“This value format by Whole Foods is doing quite well in Detroit,” Hertel said.

The limited-assortment segment such as Aldi experienced a 4.4% increase in sales to $29.9 billion last year. Hertel said this chain is adding 80 stores a year, and is up to around 1,250 stores nationwide.

“The interesting thing about Aldi is who is shopping is there. They are building these stores in mid to upscale neighborhoods with incomes between $50,000 and $100,000 and offering real values. If alarm bells aren’t going off among traditional grocery stores they should be,” Hertel said.

NON-TRADITIONAL RECAP
The report found non-traditional grocery channel sales increased 4.7% to $429.3 billion with a marketshare of 38.6% in 2012.

Supercenters like Wal-Mart and Target, wholesale clubs like Sam’s and Costco, dollar store formats, drug stores, military commissaries and e-commerce all comprise the non-traditional grocery channel. Following are financial figures for the sectors.
• Supercenter sales rose 4.5% to $192.6 billion.
• Wholesale club sales increased 5.7% to $96.3. billion.
• Dollar format sales rose 9.6% to $26.3 billion.
• Drug store food and consumable sales were $60.5 billion, up 3.1%.
• Military sales increase 0.8% to $5.1 billion.
• E-commerce food sales totaled $15.9 billion, up 16.9%.

GROWTH CHALLENGES
There are major shifts underway in an evolving retail landscape, driven largely by consumer demand connected with technology. Hertel said combine that with a still-sluggish economy and hyper competition and the prospects for real growth are slim.

“This shift in consumer behavior is creating winners and losers in the retail space,” Hertel said.

He said millenials are not brand loyal but they are price conscious, except when they are not.

“Figuring out when price matters to millenials is something retailers have to do. What we do know about this generation is that they are digitally wired and convenience driven. They also like fresh products and frequent specialty retailers,” Hertel said.

The traditional supermarkets and supercenters are set up to serve the boomer generation, whose households are downsizing, eating less, but opting for healthier choices and local products when available. He said these changes in shopping attitudes are long term and fundamental shifts to the status quo of the last 30 years.

“Just executing last year’s plan better, will not cut it in the years to come,” Hertel said.

2017 PREDICTIONS
The Willard Bishop study notes that by 2017 the marketshare for traditional grocery will shrink to 44.9%, while non-traditional formats such as supercenters, dollar stores and e-commerce pick up share. Hertel said the biggest winner over the next few years will be e-commerce, expected to grow at 12% annually.

“We expect retailers will see their e-commerce sales comprise between 10 to 12% of total sales in the next three years. This growth will be led by food and consumables sold online,” he said.

Other areas where brick and mortar stores can compete for wallet share are “fresh” and prepared foods as these are the two fastest growing segments in the grocery sector. Analysts agree that Wal-Mart’s efforts to tout its “fresh” campaign are based on the knowledge that growth in grocery is about taking marketshare from anyone they can, even cannibalizing their own stores.

Hertel said with there are dozens of “Fresh & Easy” locations going up for sale in California, an area where Amazon is looking to expand its “fresh” grocery platform. He reiterated it’s an interesting theory, but said he has no inside knowledge of any deal in the works.

As tough as growth will be to come by in the next few years, Hertel said those retailers and suppliers who are willing to test new ideas with a bias toward action will likely be rewarded over those who are have bias toward “wait and see."

He said there is room for multiple players in the e-commerce grocery space carving out their own niche with respect to products and delivery options. He doesn’t see the grocery channel withering in the sight of Amazon, but he did say the time to integrate e-commerce is now.

That didn't take long.

Less than 24 hours after The City Wire published an article questioning why colleagues of environmental activist Erin Brockovich had not returned phone calls from the media for more than two months and were not in touch with Fort Smith residents after telling those same residents that Brockovich "had their back" regarding an investigation into trichloroethylene (TCE) contamination by Whirlpool, Brockovich is defending herself.

In a phone call on Wednesday morning (June 19), Brockovich said her firm had not dropped the ball on the investigation and instead was working to get definitive data before speaking to the public.

"We certainly are in an ongoing investigation," she said. "We came to help the community. We don't have all the answers that the community wants. We wait for answers."

She recalled the last conversation that her colleague, Bob Bowcock, an environmental investigator, had with The City Wire approximately three weeks after the two held a March 26 town hall meeting with concerned residents and former Whirlpool employees.

"I do understand that Bob spoke to you and said our tests were inconclusive."

As reported yesterday, Bowcock told The City Wire that results were unavailable and to call back two weeks later. Those attempts and all others went unanswered until an e-mail was received on Monday from a Melissa Dutcher, who said Bowcock was too busy to respond to our more than 50 attempts to reach him over more than two months. It was at this time that the inconclusiveness of the tests was brought to the attention of The City Wire, just minutes before publication of yesterday's story was originally scheduled.

Brockovich said today that the reason the tests came back inconclusive was due to the testing wells being "dry."

"That always presents a situation and we are waiting for testing to come back from (the Arkansas Department of Environmental Quality)."

Brockovich did not provide additional information on what independent tests her group would do or whether or not her group would simply depend on testing results from ADEQ during their investigation.

Katherine Benenati, public outreach and assistant division chief at ADEQ, said in an e-mail on Monday that her agency only had limited contact with anyone associated with Brockovich.

"The discussion dealt with where we were in the process of reviewing the risk assessment plan. I don’t have the name of the caller or an exact date."

Addressing concerns of residents who have told The City Wire of not hearing back from Brockovich and her colleagues, she said she was sorry for any missed communication to residents.

"I understand when people are not getting the information they need. Everyone, please excuse the expression, is balls to the wall. If anyone did not get a response, I am sorry about that. We are coming back and we are still investigating and we have no intention of abandoning the community."

During the phone call, she said she could assure that all residents would get a call or e-mail returned, saying she would personally see to it.

Brockovich also said members of the team investigating Whirlpool's contamination of the neighborhood north of the company's former manufacturing facility would be coming to Fort Smith next week to meet with residents and discuss the investigation.

"It will be the end of the week," she said. "We've been going back and forth. It's somewhere, either the 26th, 27th, 28th. (We're trying) to get everyone scheduled together and what would be most convenient."

She said it was possible she would be there, as well, though she said she cannot confirm her attendance due to a previously scheduled engagement for June 30 in New York.

"We are trying to get out there and get some of the answers for the community," Brockovich said. "We don't just want to jump out with wrong information. We are quiet sometimes just because we don't have anything. That is fair to the community because we don't want to add any further frustration."

"We are still here. We haven't left. We haven't left."

Erin Brockovich said she can be reached by residents at any time by e-mailing erin@brockovich.com

The Fort Smith regional economy ended 2012 on a positive note, but first quarter 2013 conditions did not continue the trend, according to data collected for The Compass Report.

First quarter 2013 economic conditions declined compared to the 2012 period. Slippage in tax collections and building permits gains along with relatively flat employment figures dominating the economic picture in the region.

A first quarter 2013 grade of C- was down from the C in the fourth quarter of 2012 and unchanged from the first quarter of 2012.

The quarterly Compass Report is managed by The City Wire and presented by Fort Smith-based Benefit Bank. The report is the only independent analysis of economic conditions in the metro area.

Joe Edwards, president of Benefit Bank, said the regional economy is having a tough time maintaining momentum.

“The positive thing is that there has been some stabilization to our job losses, but we’re not able to get any traction for growing,” Edwards said.

The $150 million expansion at Gerber that could add up to 90 jobs, the $4 million expansion of Tankersley Food Service in Van Buren that could add up to 40 jobs and other recent expansion news do represent signs of hope, Edwards said.

“I’ve been very encouraged by some of the latest announcements. It appears to me that everyone is still in the battle,” Edwards said.

Year-on-year tax collections at the county level show that consumer spending as of February was down slightly. In Fort Smith, the tax collection figures also dipped slightly. The trend from February has continued into 2013. For the first four reporting months of 2013, Fort Smith sales tax collections are 1.55% below 2012 levels and 4.33% below budget.

While there is a lag in sales tax collection reporting by the state, the data suggest local retail activity is struggling to return to more stable patterns seen before the sharp national economic downturn experienced during 2009.

Economist Jeff Collins, who conducts the data collection and analysis for The Compass Report, said the Fort Smith region still suffers from weak employment levels.

“In March the total number of employed in the Fort Smith MSA was an estimated 121,126. By contrast, total employment in March 2006, prior to the recession, was 130,119,” Collins wrote.

Continuing, Collins noted: “Weak jobs data, as expected, negatively impact the unemployment rate in the Fort Smith area. March-on-March the rate was up 0.2%. The reason for the increase was an increase in the number of unemployed and a simultaneous decrease in the labor force. This implies that frustrated workers likely withdrew from the labor force.”

Collins said the economy is somewhat stable, but “a return to trend growth does not appear to be imminent.”

Data collected for The Compass Report also suggest that Arkansas’ economic trends are “troubling” compared to improvements in the national economy, Collins said.

“The core metric upon which the viability of continued growth must be measured is employment. If measured by the number of unemployed, the state appears to be improving. However, given there has been little change in the unemployment rate the reduction in the number of unemployed is hardly cause for celebration. There has also been a decline in the labor force. It is therefore the case that discouraged works are withdrawing from the labor force,” Collins said.

In Northwest Arkansas, the first quarter 2013 grade of B was up compared to the C posted in the fourth quarter of 2012, and was up compared to the B- during the first quarter of 2012.

The 2013 first quarter economy in the central Arkansas area received a grade of C-, meaning that economic conditions declined slightly compared to the fourth quarter of 2012, and were unchanged from conditions in the first quarter of 2012.

Collins also provided the following points about Arkansas’ top three regional economies.
• While the Central Arkansas economy had been mimicking the national economy, it now appears it reflects the broader state economy.
• Despite the set-back in manufacturing employment, it is encouraging to see the growing stability of the Fort Smith regional economy.
• The Northwest Arkansas is growing rapidly but whether this pace is sustainable remains to be seen.

FORT SMITH REGION
OVERALL GRADES — Fort Smith regional economy (per quarter)
1Q 2013: C-
4Q 2012: C
3Q 2012: C-
2Q 2012: C-
1Q 2012: C-
4Q 2011: C-
3Q 2011: C
2Q 2011: C
1Q 2011: C-
4Q 2010: C-/D+
3Q 2010: C-
2Q 2010: C-
1Q 2010: C-
4Q 2009: D
3Q 2009: D
2Q 2009: D-
1Q 2009: D+

DATA AND REPORT DOCUMENTS
Link here for the raw data used to prepare The Compass Report for the Fort Smith area, Northwest Arkansas and central Arkansas.

Link here for more narrative about regional and national economic conditions.

SECTOR DATA
CURRENT INDICATORS
Non-farm employment — C-
Non-farm employment in the area has stabilized, with employment in the metro area at 117,500 in March compared to 116,800 in March 2012.

Goods-producing employment — B
The decrease in manufacturing jobs as a percentage of the overall workforce helps diversify the economy. The percentage of manufacturing jobs in the overall workforce was 21.4% in March 2013, down from the 22.5% in March 2012.

This measure tells us about the risk to the local economy from being heavily weighted toward sectors that have been under economic pressure.

One of the fundamental principles of reducing risk is diversification. The Fort Smith economy has been based on manufacturing for decades, but this heavy reliance on one sector for employment and wealth creation has left the region vulnerable. For several years the manufacturing sector in the U.S. has shed employment as technology and international trade have redefined the production process.

As the economy of Fort Smith becomes more diversified the risk of a downturn in any one sector causing a catastrophic loss of employment diminishes.

Metro area Unemployment rate — D
The area unemployment rate, an important gauge in the health of the metro labor market, posted an increase to end the first quarter. Unemployment in March was estimated at 7.8%, compared to 7.6% in March 2012.

Sales and Use tax collections — C-
Sales tax collections in the region and the city of Fort Smith began to show weakness in the fourth quarter of 2009. That weakness began to improve in the fourth quarter of 2010, was on a stable pace, but began to cool in the second half of 2012. The tax collections, which are good indicators of regional consumer confidence, were up in Crawford, Franklin, Logan and Sebastian counties to $3.199 million during February 2013 — compared to $3.018 million in February 2012. During the December 2012-February 2013 period, overall collections were down 0.76% compared to the same period in the previous year.

LEADING INDICATORS
Building Permit (housing) valuation — B-
The total value of permits issued in the first quarter (measured in a three-month rolling average) were up 17% compared to the first quarter of 2012.

As new households are created they induce growth in retail, education services, health care services and other types of businesses that provide goods and services to households. Also, new construction provides employment and tax revenues.

Hospitality employment — B
Hospitality employment, which began trending downward in the second quarter of 2012, leveled off during the fourth quarter of 2012 and improved during the first quarter of 2013. March 2013 saw 8,800 jobs in the regional hospitality sector, up 300 jobs from March 2012.

Manufacturing employment — D
Manufacturing employment in the Fort Smith region showed signs of stability in 2012, but began to dip again during the first quarter of 2013. Sector employment in March 2013 was 18,600, down an estimated 700 jobs from March 2012 employment. Employment in the sector is down more than 34% from a decade ago.

For better or worse, Fort Smith remains a manufacturing town. That implies the near-term economy rises and falls on the performance of the sector. Growth in employment or even stable employment in the sector bodes well for the near-term outlook for the local economy.

Construction employment — D
This sector, which includes mining/natural resources employment, saw employment decline during the quarter (6,500 in March 2013, compared to 7,000 in March 2012).

The rationale for including construction employment is similar to that for building permits. The employment measure is influenced by changes in both the residential and commercial real estate markets.

Obviously, new space implies new residents and new businesses.

Economic conditions in Northwest Arkansas have been strong for several quarters, and the first quarter 2013 economy improved compared to the fourth quarter of 2012.

The first quarter 2013 grade of B was up compared to the C posted in the fourth quarter of 2012, and was up compared to the B- during the first quarter of 2012.

Ongoing job growth, impressive gains in area sales tax collections and continued increases in building permit values are some of the clearest signs of economic growth in Northwest Arkansas.

The unemployment rate in Northwest Arkansas was the lowest in the state amongst all MSAs in March (5.5%). It was more than a full percentage point lower than that for the Little Rock/North Little Rock/Conway MSA (6.7%).

To add perspective, of the 372 MSAs in the country, only 157 posted rates below 7% in March. In Arkansas, only Pine Bluff and Fort Smith have rates that exceed the 7% benchmark.

Economist Jeff Collins, who conducts the data collection and analysis for The Compass Report, said the only concern with the Northwest Arkansas economy is growth in the housing sector.

“Continued strong performance in the real estate sector has exacerbated concern in the banking community that supply may be racing ahead of demand. However, concern does not appear to have translated into reduced lending,” Collins said.

Collins said economic momentum will continue even if employment slows in some of the core sectors.

“Northwest Arkansas is likely to continue to outperform its peers. The core growth drivers remain as area employers look to add headcount and the multiplier effect implies related sectors also gain employment,” Collins explained. “The multiplier effect implies that even if employment in core sectors slowed, it would be some time before the regional economy slowed significantly.”

Data collected for The Compass Report also suggest that Arkansas’ economic trends are “troubling” compared to improvements in the national economy, Collins said.

“The core metric upon which the viability of continued growth must be measured is employment. If measured by the number of unemployed, the state appears to be improving. However, given there has been little change in the unemployment rate the reduction in the number of unemployed is hardly cause for celebration. There has also been a decline in the labor force. It is therefore the case that discouraged works are withdrawing from the labor force,” Collins said.

The 2013 first quarter economy in the central Arkansas area received a grade of C-, meaning that economic conditions declined slightly compared to the fourth quarter of 2012, and were unchanged from conditions in the first quarter of 2012.

In the Fort Smith region, a first quarter 2013 grade of C- was down from the C in the fourth quarter of 2012 and unchanged from the first quarter of 2012.

Collins also provided the following points about Arkansas’ top three regional economies.
• While the Central Arkansas economy had been mimicking the national economy, it now appears it reflects the broader state economy.
• Despite the set-back in manufacturing employment, it is encouraging to see the growing stability of the Fort Smith regional economy.
• The Northwest Arkansas is growing rapidly but whether this pace is sustainable remains to be seen.

NORTHWEST ARKANSAS
OVERALL GRADES — Northwest Arkansas regional economy (per quarter)
1Q 2013: B
4Q 2012: C
3Q 2012: B+
2Q 2012: B-
1Q 2012: B-

DATA AND REPORT DOCUMENTS
Link here for the raw data used to prepare The Compass Report for the Fort Smith area, Northwest Arkansas and central Arkansas.

Link here for more narrative about regional and national economic conditions.

SECTOR DATA
CURRENT INDICATORS
Non-farm employment — A-
Non-farm employment is well ahead of 2012 figures, with employment in the metro area at 217,000 in March compared to 208,200 in March 2012.

Goods-producing employment — B
The decrease in manufacturing jobs as a percentage of the overall workforce helps diversify almost any metro economy. The percentage of manufacturing jobs in the overall workforce was 16.3% in March 2013, down from the 16.5% in March 2012.

This measure speaks to the risk in a local economy from being heavily weighted toward sectors that have been under economic pressure. One of the fundamental principles of reducing risk is diversification.

Metro area Unemployment rate — C+
The area unemployment rate, an important gauge in the health of the metro labor market, improved in the first quarter. Unemployment in March was estimated at 5.5%, compared to 5.8% in March 2012.

Sales and Use tax collections — C+
Sales tax collections in the region have shown steady gains since 2010. The tax collections, which are good indicators of regional consumer confidence, were up in Benton, Madison and Washington counties to $6.148 million during February 2013 — compared to $5.951 million in February 2012. Overall, collections were up for the quarter.

LEADING INDICATORS
Building Permit (housing) valuation — A
The total value of permits issued in the first quarter of 2013 (measured in a three-month rolling average) were higher than those in the first quarter of 2012. The rolling average in March was $33.06 million, ahead of the $29.832 million in March 2012.

Residential building is an indicator of current and expected population growth. As new households are created they induce growth in retail, education services, health care services and other types of businesses that provide goods and services to households. Also, new construction provides employment and tax revenues.

Hospitality employment — B
Hospitality employment in Northwest Arkansas has trended positive for several quarters. March 2013 saw 20,500 jobs in the regional hospitality sector, up from the 19,600 jobs in March 2012.

Growth in the hospitality and leisure sector as measured by growth in employment is included because of the emphasis on creating quality of place in local economic development initiatives.

Unlike enplanements/deplanements, which November or November not be tied to activity in restaurants, hotels, and cultural venues, hospitality and leisure employment most certainly are influenced by growth of these activities. Another possible measure is hospitality-related tax collections.

Manufacturing employment — B+
Manufacturing employment in the region showed signs of stability during the quarter. Sector employment in March 2013 was 27,000, up from the 26,700 during March 2012. Employment in the sector is down more than 20% from more than a decade ago.

Construction employment — C-
This sector, which includes mining/natural resources employment, saw gains in employment compared to the first quarter of 2012, ending March with 8,400 jobs, up over the 7,700 jobs in March 2012.

The rationale for including construction employment is similar to that for building permits. The employment measure is influenced by changes in both the residential and commercial real estate markets.

Obviously, new space implies new residents and new businesses.

The Sam M. Walton College of Business at the University of Arkansas is providing an online certificate program in business analytics this fall.

“Right now, one of the biggest things going on in our world is this big data explosion,” said Eli Jones, dean of the Walton College. “Getting the tools – the knowledge – of how to find patterns in big data, that is going to accelerate one’s career. There are people who are looking for people who can make decisions based on big data. There are huge opportunities in this area, and the Walton College is taking a leadership role in addressing that key need.”

The business analytics certificate program provides a an online experience focused on learning concepts and techniques in data management, analytics and data mining, according to the UA press release.

Students work with large-scale, real-world data sets from active companies, including Sam’s Club, Tyson Foods Inc., Dillard’s Inc. and Acxiom Corp.

Understanding data patterns and trends helps businesses make better operational and strategic decisions and increases the speed with which these decisions are made. Companies are seeking employees with a skill set that includes at least a foundational understanding of business analytics.

“You cannot find people that already have experience with analytics and big data,” said Avery Nash, expert product executive for Little Rock-based Acxiom. “If you have gone through the business analytics certification at Walton College, we know that you at least know what we are talking about, and you have an interest in it, and you’ve shown some aptitude for it.”

Gary Cooper, senior vice president and chief information officer for Tyson Foods in Springdale, said companies such as his are looking for employees who have the necessary business foundation and an ability to analyze data when discussing a company's return on investment. People who earn this additional certification will become more valuable in the workforce, he said.

This certificate program – accredited by the Association to Advance Collegiate Schools of Business – is designed for people who have earned a bachelor’s degree and seek additional skills in business analytics. All coursework is delivered online. The program can be completed in nine to 12 months, and those who complete it may be eligible to receive a certificate endorsed by the SAS Institute. Credit hours in this program may also be applied to the Master of Information Systems degree program offered by the Walton College.

The application deadline for the graduate certificate in business analytics program is July 1, but late applications may be considered on a space-available basis. Email gsb@walton.uark.edu or visit this website for more info.

Earlier this month, the American Institute of CPAs (AICPA) introduced a new framework of standards that accounting leaders say could reduce costs and streamline financial reporting for small businesses.

The AICPA’s Financial Reporting Framework (FRF) for small- and medium-sized entities (SMEs) is a new accounting option for preparing streamlined, relevant financial statements for privately held, owner-managed businesses that are not required to use Generally Accepted Accounting Principles (GAAP) like many large U.S. companies.

“The FRF for SMEs has been developed to provide consistent and simpler financial statements for small- and medium-sized entities where GAAP is not required,” said Barry Melancon, president and CEO of the AICPA. “Some private businesses, typically smaller or those with less complex business models, will see the AICPA’s framework as an effective alternative to other existing financial reporting options.”

WHAT IT DOES
The Financial Reporting Framework (FRF) would allow small businesses to prepare financial statements that clearly and concisely report what a business owns, what it owes and its cash flow.

The new framework uses only historical cost as a basis for valuing assets and liabilities, not current market value. It also doesn’t include more-complex accounting, such as off-balance-sheet entities, derivatives or hedging. The process has more practical and less complicated goodwill accounting, too.

The reports could satisfy lenders, insurers and regulators who need to determine the creditworthiness of businesses.

“I think this new accounting framework is exactly what business owners, CPAs and community bankers have been looking for as a viable and reliable alternative to the options already available,” said Richard Caturano, chairman of the AICPA Board of Directors.

The new accounting framework was developed by a working group of experts from the CPA profession. It has also undergone public comment and professional scrutiny, and incorporates significant feedback from CPAs, bankers and other relevant stakeholders, the AICPA said.

“The FRF for SMEs is not GAAP and it is not intended to become GAAP. It is another comprehensive basis of accounting with a framework around it for enhanced financial reporting,” said Melancon.

The new framework, if eventually accepted, would be optional for companies who might choose to adopt it. The AICPA does not have any authority to compel companies to do so.

It’s a simple concept that excites Adam Kuettel and Christian Baldwin: connect retail ideas with retail experience and, possibly, retail money in such a way to create another level of economic activity around the Wal-Mart-infused retail sector in Northwest Arkansas.

Kuettel has been involved in finance and investments a little more than five years. He began in Fort Smith with Beall Barclay & Company in December 2007. After a series of jobs, he left Denver in August 2012 to be a managing partner at NWA Financial Partners in Bentonville.

“I knew what was happening here (Northwest Arkansas) and felt like there was an opening to provide that (investment advice) to the” Wal-Mart supplier community, Kuettel explained.

It’s a big community. An estimated 1,300 companies have offices within a 27-mile radius of the Wal-Mart Stores corporate headquarters in Bentonville. The companies have created around 6,000 high-income jobs in the area. The multi-tiered supplier community also creates a large pool of retail talent from a vast array of industries related to products, services and supply-chain logistics.

Baldwin has an engineering background and worked seven years in the retail industry. He’s been in Northwest Arkansas since 2006, and is the managing director of Black Diamond Mergers & Acquisitions. Black Diamond works with companies who have annual revenue of between $5 million and $100 million and operate in information technology, telecommunications, healthcare and/or retailer-based software and support services.

Although Baldwin and Kuettel work for different firms, they see a need in the retail sector to help in three basic ways:
• Secure funding for undercapitalized people or companies to develop a new product or service for the retail sector;
• Secure funding for people or companies with existing products or services who want to expand; and,
• Help find buyers and sellers for product and service companies within the retail sector.

And while the concept may seem simple, the details are anything but. However, Kuettel noted that in San Jose, Calif., (Silicon Valley area) there are numerous groups in place who help startup or existing tech companies. He thinks a similar environment should exist around the Wal-Mart world.

“Here in Northwest Arkansas, this is the retail capital of the world. So why shouldn’t that, that network of private equity for these (retail) ideas be here?” Kuettel said.

An example of who they want to help could be the small mom-and-pop operation that gets a product on the Wal-Mart shelves and it sells well. A Wal-Mart buyer calls and says they want to expand the product from two stores to 200 stores.

“That company is going to need the cash to do several pallets of products compared to just a few boxes,” Kuettel said, adding that the company may also need the expertise of former Wal-Mart vendors or retail execs on how to manage the growth and possibly expand to other retailers.

To provide that expertise, Baldwin said the collaboration between he and Kuettel includes working with retired execs “rich with retail experience.”

“A lot of these guys know and can see a diamond in the rough long before anyone else,” Baldwin said.

In that example, there would be at least a three-pronged process that would have to happen almost simultaneously.
• Contacts would have to be made with manufacturers to determine the costs and ability to produce more product at the same specifications.
• There would need to be an open dialogue with the Wal-Mart buyer to keep the shelf space available.
• Efforts would have to move forward on financing the increased production.

To further the example, Kuettel said several months down the road another company – possibly an existing and larger Wal-Mart vendor – may see the product and want to buy it and the company.

“And so we could work that deal,” Baldwin said.

Jeff Amerine, an entrepreneurial advisor in Northwest Arkansas and director of technology licensing for the University of Arkansas, said he is not familiar with Baldwin and Kuettel’s collaboration, but welcomed their efforts.

“There is plenty of room in this area for people with innovative ways to connect savvy capital with good ideas,” Amerine said.

Amerine’s job was created earlier in 2013 to streamline the process of moving ideas out of the university’s research programs and into the economy. He joined the university as a technology licensing officer in 2008 after an 18-year career as an executive and builder of technology businesses.

Amerine said Northwest Arkansas is becoming more successful in attracting private equity and other resources to support ventures related to retail and many other sectors.

“We’re just at the beginning of the beginning with this process. ... It’s an exciting time,” Amerine said of the effort to increase private equity support in Northwest Arkansas. “I’m pleased to hear that more of this is happening. That builds upon a lot of what is already happening.”

Amerine also said he hopes Baldwin and Kuettel are able to attract local venture capital to ensure that startup companies remain in the region.

Baldwin and Kuettel are less than four months into the effort and are pleased with the results. As of June 7 they had seven “deal opportunities” brewing with two above $40 million.

“The market response has been remarkably great,” Kuettel said.

If the first efforts prove successful, the two hope to push the collaboration beyond $40 million deals.

“With this (process), we could also do some very big stuff with the big brands,” Kuettel said.

Homes sales for the month of May were pretty even with the same month last year, though total sales volume in Crawford County was up slightly while Sebastian County saw a decline in sales volume.

In Sebastian County, sales of new and existing homes were valued at roughly $14.791 million with 105 homes sold in the month of May. The same period last year saw 102 homes sold, but with a value of $15.028 million, a total decline of 1.58% year over year.

Crawford County saw 46 home sold during the month of May, while 44 homes were sold during the same month in 2012. The value of homes sold this year totaled $5.691 million, while last year's sales only totaled $5.266 million, an increase of 8.073%.

Overall, home sales in the combined Crawford-Sebastian County area were even with last year, only rising 0.01% during the first five months of 2013 versus the same period last year.

Chuck Fawcett, broker/owner of Chuck Fawcett Realty in Fort Smith, said he feels good about the housing market and said the numbers show some stabilization in the market. And while the numbers may not reflect definitive increase in business, Fawcett said his business is buzzing.

"Right now the market is pretty strong. We sold three or four brand new houses in the past month," he said, adding that he had additional customers looking to buy existing homes in the market, something that has been a big driver in the housing market as of late.

With the push to purchase already-existing homes versus new, the average sale price was impacted last month.

In Sebastian County, the average price of a home sold during the month of May was $140,869, while the same month last year saw an average price of $147,334. In Crawford County, the average last month was $123,712, an increase from $119,674 during the May of last year.

Fawcett said homes built by mass-producers of homes, such as Rausch-Coleman, could be partially to blame for the declining average price in Sebastian County. But he said the increase in Crawford County was a direct correlation to the lower cost of living north of the Arkansas River.

"More people are getting a lot more house in Van Buren," he said. "They can get a lot more house over there than in Fort Smith."

For the remainder of the year, Fawcett sees a surge in the number of home sold and the value of new homes coming to the market.

"Yes, because right now in Sebastian County we have a subdivision out off Massard Road that will have more expensive homes and Carrington Creek is doing a subdivision out on Massard that will have expensive homes with probably 100 or so lots. That will be good for Fort Smith."

Homes Sales Data (January - May)
• Crawford County
Unit Sales
2013: 182
2012: 222

Total Sales Volume
2013: $19.767 million
2012: $25.232 million

Media Sales Price
2013: $109,900
2012: $102,000

• Sebastian County
Unit Sales
2013: 444
2012: 405

Total Sales Volume
2013: $59.283 million
2012: $53.807 million

Median Sales Price
2013: $110,000
2012: $110,000

Businesses from everyday product suppliers to the world’s largest retailer have been caught up in the information craze known as “big data."

The “big data” market stands at more than $5 billion based on related software, hardware, and services revenue. But industry expectations are a 58% compound annual growth rate that will push revenue to $50 billion by 2016, according to Wikibon.

The rapid growth in “big data” vendors has also brought the cost down which can now allow smaller companies to participate.

The pay-off from joining the “big data” movement and analytics management revolution is no longer in doubt but the a recent report from McKinsey & Co. notes most companies don't yet have a plan for what to do with all that information.

Experts in the field encourage businesses to nail down a plan that is complete with goals and objectives the data collected must meet. Paring down data collection is also a good idea, looking for the most relevant content for driving future business.

MULTIPLE POSSIBILITIES
McKinsey notes businesses from many sectors can benefit from “big data” applications, when they have the right plan in place for information collection and application. That could be something as simple harnessing social media to draw consumer insight and preferences.

Suppliers like Frito Lay gather “big data” to chose new chip flavors based on a Facebook application shared among its fan base. Banking could benefit from using big data to create near instant loan approvals and keep rates flexible based on live market data.

Health care could use "big data" to provide real-time diagnostics.

Manufacturing is using text analytics to help identify product defects which reduces losses.

Retail is using balancing point-of-sale data against production and logistics to minimize inventory and keep down operating costs.

Utility companies are using smart meter analytics that optimize rates and maintain load-balance on the grid.

RETAIL APPEAL
Roughly 6 million people walk into a Walmart Store each day and the retailer, like many of its competitors, is closely watching what is bought, how much time is spent in certain departments and whether or not shoppers are using their smart phones while in the store.

Wal-Mart and much of the retail industry and its supply chain are mining information in hopes of better understanding what consumers want. The mega retailer recently acquired a big data startup, Inkiru.

Wal-Mart spokesman Ravi Jariwala said, “Inkiru's predictive analytics platform will enable Wal-Mart to further accelerate the big data capabilities built out by @WalmartLabs."

He said Iriku insights will be used to extend the business impact in search, personalization, marketing, customer segmentation and merchandising.

In other words, Wal-Mart continues to dig down into the weeds trying to apply the knowledge gained from data mining to enhance product selection and customer experiences with a goal of selling more.

Memphis-based AutoZone has also joined the “big data” revolution using software that crunches information in local areas such as the kinds of cars people drive in Northwest Arkansas or the air-freshener fragrances preferred in Little Rock. The auto supply retailer uses the data to localize certain product offerings that appeal to the demographic near each of its stores.

Supply chain management experts at the University of Arkansas have said the timing for data collection is ripe. While data have been available for years, processing power and storage space has finally become cheap enough. That, and better algorithms combined with the pervasiveness of social media create opportunities for enormous insight into consumers minds.

SMALL BIZ STANDOFF
While large companies have been wrangling big data from several years, smaller firms have been slower to the take.

Intuit recently surveyed 500 small businesses found 15% who said using big data was still too expensive. Another 14% expressed they did not have the time to use it, and 10% admitted they don’t understand how big data can help their business.

Karen Mills, administrator with the Small Business Administration, said small businesses need not be intimated by data analytics because there are free or inexpensive tools available by the SBA to help business owners gather data and better understand how to use it to increase profitability.

"One of the early providers of big data to small businesses was Google, whose Adwords, Adsense and Analytics products give small businesses rich insight into their online presence," Mills said in a CNBC interview Thursday (June 20).

Mills said technology is the great equalizer for small businesses, using the example of how radio frequency tagging has helped small suppliers track their products through the supply chain.

She said small businesses can also take part in “big data”  by outsourcing their marketing to third party providers who use data analytics and social media platforms.

“Big data is not just for big business,” she said.

Following the deaths of veteran storm chaser Tim Samaras, one of the stars of Discovery Channel's "Storm Chasers," along with his son Paul Samaras and colleague Carl Young in the May 31 EF5 tornado that struck El Reno, Okla., a lot of questions have been raised about the safety of storm chasing, whether for science or television or thrill seeking.

But one area of storm chasing that has received little attention or scrutiny since the deadly El Reno tornado, which also injured a crew from The Weather Channel, is a new type of tourism that has attracted everyone from thrill seekers to families to groups of Japanese tourists – tornado tours. And it pretty much is just what it sounds like - going on group tours in search of tornadoes.

Ryan Hoke, a tour guide with Bozeman, Mont.-based Storm Chasing Adventure Tours and a trained meteorologist, said the company he chases with has been in business since 1997 and provides paying tourists six day trips in search of twisters.
www.stormchasing.com/

The $2,400 cost mainly covers transportation expenses and hotels and in some cases, the company's paying customers get just what they're looking for when they leave for tours from one of the company's tour bases in either Oklahoma City or Denver.

"(The closest to a tornado that we've taken a group) I would say is about 150 yards," Hoke said. "We were in southeast Colorado and there was a very, very slow moving tornado, like 20 miles per hour. The visibility was great and road options were excellent. It was a compact tornado and we had a clear shot to get out of its way, so we were able to get 150 yards from it and in my opinion, I think it was completely safe."

Hoke said part of the determination in that storm, and every storm he and his tornado chasing tour group chase, in how close to get was based on the movement of the storm. He said the tornado was moving east to west, while the group was on a road that ran north to south, giving the tour guides an easy path to escape the storm's path while monitoring the storm on radar and visually.

While the storm was an adventure, he said, the reality of storm chasing, especially in Oklahoma and Kansas, is that roads get clogged with storm chasers – amateur, professional, television and tour groups. The risks, he said, are minimal for his groups, but he can understand how an incident like the deadly El Reno tornado could happen.

"Something that we've really become upset about in the last three years that I've been out there, and it came to light in 2010, is you've got these chaser convergences where you get massive amounts of vehicles, locals, people who don't know what they're doing, government researchers and that creates a real challenge for us. We need to get to the storm and get close to it, but at the same time, you have an incredible safety issue. You have small roads that are congested and it creates the perfect storm."

Meteorologist Brad McGavock with the National Weather Service in Tulsa equated the tour groups to entertainment and said it was important to know who you are with.

"We would recommend that people who do that go with someone with a reputable background that are skilled in the practice. It can be a dangerous situation."

Drew Michaels, chief meteorologist at ABC affiliate KHBS/KHOG-TV, said while groups like Storm Chasing Adventure Tours may tout safety, it is tough to determine which groups are safest when deciding to take part in a storm chasing tour, whether locally or out of state.

"There are no governing of these groups," he said. "It's not like you can go to the Better Business Bureau about these groups."

McGavock cautioned that even experienced storm chasers, such as Tim Samaras, were caught of guard by the El Reno tornado, which made a hard left turn and caught many chasers by surprise.

Michaels said tornado tours cannot "be 100% safe and it's definitely a risky type of business."

He also mentioned the possibility of storm shifts McGavock mentioned.

"They don't realize that if the storm shifts, they're dead or can be in a bad spot. …If you're in the wrong place, you're not going to survive that unless you're underground."

A situation similar to what happened to Samaras, The Weather Channel crew and other storm chasers in El Reno is something that Michaels said can definitely happen to tour groups, as well.

"I think if it's the right situation, yeah, you very well could (have deaths during a storm chasing tour). Anything's possible and it just kind of depends on where you are. (Tim Samaras) was known as a conservative chaser and scientist. So what's to say that someone running a tour group is in the wrong place at the wrong time. You bet it could happen."

Because of the increase in so many groups chasing, and not just tour groups, and no governing body to instruct chasers in safe practices or hold dangerous storm chasers accountable for risky actions, Michaels thinks it is just a matter of time before some sort of legislation is passed, whether in Oklahoma or other states, regarding storm chasing practices.

"If more people are chasing storms and this doesn't stop, you wonder when the government steps in or when on the local level, people start stepping in and says this goes too far," he said. "If the government meddles with Major League Baseball and steroids, I bet something like this will happen. We're just kind of waiting."

Hoke said the company he chases with has a safe record, though he acknowledged that there is risk with any type of storm chasing. He said while he was unsure of what kind of insurance the company holds to protect itself and customers, he was sure of one thing the company does.

"We do make folks sign a waiver. It very clearly spelled out what the risks are and what we're facing. We're hopeful that everything will be fine and we're safe. So far everything has been fine. If the day comes that something happens, you always have to have your bases covered."

But Michaels said for anyone interested in weather and storm chasing, a better option would be to take a National Weather Service-sponsored severe weather spotter class offered late in the year and leave the chasing to the scientists and professionals.

"I would caution people about doing (tornado tours). …If you become a (NWS-trained) spotter, you are providing the community with valuable information."

An almost 2% decline in Arkansas’ workforce and the number of employed pushed the state’s jobless rate higher to 7.3% in May, with one market watcher noting an unusual and troubling trend in Arkansas’ construction sector.

Arkansas’ jobless rate was 7.3% in May, up from the revised 7.2% in April and unchanged from May 2012, according to a Friday (June 21) report from the U.S. Bureau of Labor Statistics.

Arkansas was one of 17 states to post jobless rate increases during May. May marks 52 consecutive months that Arkansas’ jobless rate has been at or above 7%.

The number of employed in Arkansas during May was down an estimated 23,126, or 1.86%, compared to May 2012. The number of unemployed fell from 99,048 in May 2012 to an estimated 96,965 in May 2013. Also, the number of unemployed increased by an estimated 1,761 between April and May.

The workforce size shrank from an estimated 1.358 million in May 2012 to 1.333 million in May – a 1.85% decline.

Arkansas’ annual average jobless rate fell from 7.9% during 2011 to 7.3% during 2012.

CONSTRUCTION SECTOR LOSSES
Greg Kaza, executive director of the Arkansas Policy Foundation, said the construction sector “is a missing piece of the Arkansas employment puzzle as the U.S. economy enters its fifth year of expansion.”

According to Kaza’s analysis of state and federal labor reports, Friday’s nonfarm payroll employment report shows that Arkansas’ construction sector has shed 3,300 jobs since the recession ended in June 2009, contracting from 50,700 to 47,400 in May.

“These Arkansas construction job losses are the largest contraction in 12 postwar national expansions dating to October 1945,” Kaza said in a memo to The City Wire. “Construction jobs contracted in only one other expansion (July 1980 to July 1981), falling from 39,800 to 36,500, according to state labor market data.”

The construction sector employed an estimated 47,400 during May, up slightly from the 46,700 during April and below the 48,300 during May 2012. Employment in the sector is down 6.3% from May 2003.

Kaza’s memo also included the following analysis.
• The average postwar gain in Arkansas construction at the 48-month stage was 5,660.

• According to today’s (June 21) BLS data, Arkansas construction has lost 3,300 jobs in the expansion, and is a missing piece of the employment puzzle because monetary and fiscal stimulus is not working as forecast.

• If stimulus was working well at the state level, these two numbers would have generated a net gain of 8,960 Construction jobs, resulting in an Arkansas unemployment rate less than 7%, not today’s reported 7.3% rate.

ARKANSAS SECTOR NUMBERS
In the Trade, Transportation and Utilities sector — Arkansas’ largest job sector — employment during May was an estimated 253,100, up from the April number and ahead of the 241,400 during May 2012.

Manufacturing jobs in Arkansas during May totaled 154,300, down from the 155,300 in April and below the 156,400 in May 2012. Employment in the manufacturing sector fell in 2012 to levels not seen since early 1968. Peak employment in the sector was 247,300 in May 1995.

Government job employment during May was 214,700, down from 216,100 in April and below the 216,400 during May 2012.

The state’s Education and Health Services sector during May had 174,500 jobs, down from the 175,400 during April and up from 172,200 during May 2012. Employment in the sector is up almost 25% compared to May 2003.

Arkansas’ tourism sector (leisure & hospitality) employed 101,200 during May, down from the 102,300 during April and less than the 102,600 during May 2012. At a revised 103,700, January 2013 marked a new employment high in the sector.

NATIONAL DATA
The BLS report also noted that 41 states had unemployment rate decreases from a year earlier, four states had increases, and five states had no change. The national jobless rate was essentially unchanged from April at 7.6% but was 0.6 percentage point lower than in May 2012.

Nevada had the highest unemployment rate among the states in May at 9.5%. The next highest rates were in Illinois and Mississippi, 9.1% each. North Dakota again had
the lowest jobless rate, 3.2%.

The May jobless rate in Oklahoma was 5%, up from 4.9% in April but below the 5.1% in May 2012.

Missouri’s jobless rate during May was 6.8%, up from 6.7% in April but below the 7% in May 2012.

Jason J. Degn of Omaha, Neb., has accepted the position of technology/chief information officer for NorthWest Arkansas Community College.

Degn was one of 40 applicants for the position and he will begin word Aug. 19.

“Jason has experience with strategic technology planning and execution to improve instructional and operational units within a college,” said Debi Buckley, chief financial officer at NWACC.

“He also has significant experience providing day-to-day leadership of institutional technology personnel while providing timely client support. These skills sets and experience will be invaluable as the college continues to offer cutting-edge technology in the classroom, both on the ground and online,” she said.

Degn holds a similar position at the College of Saint Mary, a private higher education institution in Omaha, where he worked for more than 10 years.

He holds a bachelor’s degree in computer science from the University of Nebraska at Kearney and is pursuing a master’s degree in management information systems from the University of Nebraska at Omaha.

He has served on the Network Nebraska Advisory Group since 2012 and was named “30 under 30” top young professionals in Omaha in 2010.
 

Mexico-based Bachoco, owner of O.K. Foods, is expanding its investment in Arkansas as the poultry company signed a deal to acquire the breeding assets of Morris Hatchery Inc. located in south Arkansas, near Warren.

These assets comprise mainly equipment and bird inventory. This operation has a capacity of around 350,000 thousand laying hens that produces hatching eggs.

"This is a strategic acquisition for our company for several reasons; first, it will rapidly reinforce our supply of hatching eggs for our Mexico and U.S. operations, thus ensuring a proper supply of chicken for our customers. Secondly, it represents a step towards our organic growth,” said Rodolfo Ramos CEO.

He said the location in south Arkansas is far enough from its other breeding complexes, thereby” increasing dispersion and reducing sanitary risks.”

This acquisition will take effect immediately

Rogers Bancshares owns 99.75% of Metropolitan Bank, a financial institution that has recorded losses in excess of $98 million since 2009.

But it turns out the bank’s ownership is in even worse shape with debt exceeding $91 million and a single bid of just $16 million to satisfy creditors, according to the firm’s recent bankruptcy filing. The holding company has roughly $60,000 in unencumbered cash.

As the bank’s holding company, Rogers Bancshares is seeking relief in bankruptcy court in hopes that the bank will be sold to a Texas Group with the wherewithal to hoist it out of its distressed state.

Rogers Bancshares said it has spent four years contacting 35 potential investors before a deal was struck with LR Acquisition, a venture co-managed by Dallas-based bankers Gerald Ford and Carl Webb. The deal was announced July 5.

Garland Binns, attorney with Dover Dixon and Horne, said the bankruptcy is necessary to clear the way for the bank sale because the holding company is insolvent.

The list of creditors standing in line include: U.S. Bank and Bank of New York Mellon Trust who hold Trust Preferred Securities, which are instruments banks commonly use to raise capital.

TARP OBLIGATION
The U.S. Treasury Department was also sent notice of the bankruptcy filing, as it holds $25 million in preferred stock issued by the holding company as part of the Troubled Asset Relief Program (TARP).

Technically the Treasury Department is not a creditor of the holding company, but that does negate the fact that the $25 million Rogers Bancshares and Metropolitan National took from TARP bailout has never been repaid.

Metropolitan National came under enforcement actions in the summer of 2008 and still was able to secure funding from the federal government to the dismay of competing banks.

In early 2009, Rogers Bancshares issued $25 million of fixed rate Cumulative Perpetual Preferred Stock, to the United States Treasury Department, funds that were transferred to Metropolitan National Bank.

The holding company notes in the filing that Metropolitan was in “sound shape” when it got the funds. However, the bank reported losses of $41 million in the first half of 2009, escalating to $80 million by December 2009 as regulators turned up the heat.

The holding company has missed 16 dividend payments to the Treasury Department totaling $5.1 million owed to the Treasury and taxpayers on top of the $25 million in un-retired debt.

STAFFING & BRANCHES
While last week’s announcement indicates top management will remain in place, details provided in the bankruptcy filing indicate the bank staffing is high given its size relative to other institutions.

Metropolitan National notes in the filing there are 438 employees for a $1 billion bank. That breaks down to about $2.25 million in assets per employee. Most industry analysts say the metric industrywide is roughly $4 million in assets per employee, and headed to $5 million for more efficient bank operations.

Staff cuts are likely if the new owners seek to normalize employees-per-assets.

Metropolitan’s investment in Northwest Arkansas exceeded $30 million in branch infrastructure between 2005 and 2007. The 14 branches in Benton and Washington counties have a book value of roughly $40 million, according to the filing. But deposits in those branches total just $70 million, making them expensive operations for a bank low on capital.

Any sale or writedowns of these bank-owned, physical assets over the past few years would have come at a loss, which the bank didn’t need on its books.

As with the possibility of staff cuts, it’s possible that new ownership may look to streamline expenses by closing underperforming branches in the Metropolitan system.

The Arkansas Public Service Commission on Wednesday (July 10) approved a $408 million plan to add environmental protection equipment to the Flint Creek Power Plant near Gentry, Ark., that could increase plant jobs by up to 30.

Estimated customer rate increases of just under 4% could begin in 2017.

Flint Creek is 50% owned by Southwestern Electric Power Co. (SWEPCO), a subsidiary of Columbus, Ohio-based American Electric Power. The other half of the operation is owned by the Arkansas Electric Cooperative Corp. (AECC).

Completed in 1978, Flint Creek is a single-unit 528 MW baseload coal-fired steam electric generating plant that provides power 24 hours a day. It is the only baseload power plant in Northwest Arkansas.

New Environmental Protection Agency regulations required SWEPCO and AECC to equip the plant with “additional environmental controls” to continue plant operation beyond April 16, 2016, according to a SWEPCO release.

Flint Creek has 69 employees and an annual payroll of $3.9 million, according to SWEPCO. The project will create approximately 300 construction jobs at peak and 20 to 30 permanent jobs to operate the new equipment.

If environmental permits are approved, construction is set to begin January 2014. The equipment is to control or reduce emissions of sulfur dioxide, nitrogen oxide, mercury and other air pollutants.

According to the Public Service Commission (PSC) document, SWEPCO reviewed three options for replacing the existing power generation equipment at Flint Creek instead of installing equipment to the existing coal-fired operation.
• Converting to a natural gas-fired plant.
• Building on-site a natural gas combined cycle plant.
• Building elsewhere in the Southwest Power Pool region a new natural gas combined cycle plant.

SWEPCO and AECC officials said natural gas conversion would have required construction of “one or more expensive gas pipelines” to the facility.

The Sierra Club opposed renovations to the coal-fired generation plant. Sierra Club officials said SWEPCO never “satisfied its burden of establishing that retrofit of Flint Creek is in the public interest.” The PSC documents notes that Sierra Club officials “asserted that the record ‘shows that there are less expensive ways to provide power to SWEPCO’s ratepayers, and SWEPCO has not shown that Flint Creek is needed for reliability of the transmission system.’”

But after reviewing documents and testimony from several hearings, Commissioners Collette Honorable, Olan Reeves, and Elana Wills approved the plant renovations.

Their conclusion noted: “Having carefully considered and weighed all of the evidence presented by the Parties in this proceeding, the Commission finds that there is substantial evidence of record, from both a cost and reliability perspective, which supports the installation of the required EPA environmental controls at Flint Creek so that Flint Creek can continue to be operated as a baseload electric generation plant in the Northwest Arkansas area.”

SWEPCO estimates a potential rate increase of approximately $2.97, or 3.85%, for SWEPCO’s residential Arkansas customers (based on average use of 1,000 Kwh per month) beginning in 2017. The potential commercial rate increase is estimated at 3.87%.

A rate recovery for installation costs have yet to be determined by the PSC.

Venita McCellon-Allen, SWEPCO president and CEO, praised the decision.

“The Commission’s decision recognizes the importance of Flint Creek as a base load power plant for Northwest Arkansas,” McCellon-Allen noted in the SWEPCO statement. “It also reflects a place for coal in Arkansas’ energy future, continuing SWEPCO’s strategy of fuel diversity that avoids over-reliance on any one fuel to provide greater fuel cost stability for our customers.”

SWEPCO has 520,400 retail customers in three states, including 113,700 in western Arkansas, 225,700 in northwest and central Louisiana and 181,000 in north and eastern Texas.

Flint Creek co-owner AECC provides wholesale electricity to Arkansas’ 17 electric distribution cooperatives. The cooperatives serve almost 500,000 members in Arkansas.