Analysis indicates Warren plant closure could cost millions to state in revenues, GPD
Posted
By the U of Arkansas System Division of Agriculture
MONTICELLO — The idling of AHF Products’ Warren flooring facility will mean loss of 130 jobs with a ripple effect of millions in lost revenue and gross domestic product to Arkansas, according to an analysis released this week.
The Mountville, Pennsylvania, company said on July 29 that it would consolidate its solid hardwood flooring manufacturing at its plants in Beverly, West Virginia, and West Plains, Missouri. The Warren facility will close its doors Sept. 27.
Economic analyst Rebecca Montgomery examined the effects of a manufacturer in Warren.
Rebecca Montgomery, an economic analyst for the Arkansas Agricultural Experiment Station and its Arkansas Forest Resources Center, wrote the analysis for the Arkansas Center for Forest Business. The experiment station is the research arm of the University of Arkansas Sytem Division of Agriculture.
“The loss of 130 jobs at AHF will produce a total loss 275 jobs across the region resulting in the loss of $16 million in labor income,” Montgomery said. “County tax revenues will decline by $350,000 and state tax revenue will decline by $1.6 million.
“Arkansas’ gross domestic product will decline by $36 million,” she wrote. However, “though the initial impacts of the loss will be difficult, it will not be permanent as AHF workers find other jobs [and] the economy will recover.”
AHF said it would retain ownership of the plant and restart operations if conditions improved. However, “we do not foresee this happening soon,” AHF Products President and CEO Brian Carson said in a release. “It was a difficult decision because closing a plant impacts people and their local towns. We are extremely grateful for the dedication and service of all the employees over the years since the plant has been in operation.”
Statewide, flooring and millwork employs 903 people and pays an average annual compensation of $56,582, Montgomery said. Hardwood flooring mills are able to produce high-quality products from trees with numerous defects, providing landowners with income from trees that would bring lower prices from other types of mills.
The forestry industry, which includes the kind of work done by AHF, contributes some 4.1 percent of Arkansas’ GDP.
