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Arkansas’ economy was on track for robust gains in 2022 until the Omicron variant of COVID-19 put a kink in the line. Economists still believe the state’s economy will grow in 2022, with labor shortages possibly being a factor limiting growth.

John Shelnutt, administrator of economic and tax research at the Arkansas Department of Finance and Administration, said high growth in several sectors – travel, restaurants, personal services, and educational services – expected for early in 2022 may be pushed forward to mid-year because of the Omicron surge. That surge peaked in late January after active cases rose above 101,000 and hospitalizations approached 1,700. The active cases as of Feb. 5 was down to 41,069, and hospitalizations were down to 1,512.

“Recent gains in the sectors hard hit by COVID-19 will be challenged again in the first half of the year by the more rapid spread of the omicron variant. High growth in the state’s private sector employment base in the second half of 2021 was marked by a blend of high growth from rebound in hard-hit sectors and continued expansion in the early-recovery sectors. A resumption of that pattern is expected by mid-year but not before dampening the annual growth that was initially expected,” Shelnutt told Talk Business & Politics.

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