Arkansas’s gross domestic product, or GDP, grew at a higher rate than any other state in the nation through the first quarter of 2016. Data from the U.S. Bureau of Economic Analysis on Wednesday shows the state's 3.9 percent GDP growth outpacing the national rate of 1.2 percent.
The Director of the Center for Business and Economic Research at the University of Arkansas, Kathy Deck says other positive economic indicators preceded this measurement of the state’s economic output.
“The first thing I noticed with our hefty growth rates in the first quarter were how consistent they were with other statistics that we’ve seen,” said Deck. “Arkansas has been showing some of the most attractive unemployment rates in the nation, some of the most attractive employment growth rates so really it’s not surprising that these GDP statistics should be so good.”
Agriculture accounted for the majority of the state’s GDP growth, contributing 2.21 percent to the state’s 3.9 percent growth. Nationally, agriculture did not play a substantial role in GPD growth. Deck said in Arkansas, agricultural strength typically plays an important role early in the year.
“Agriculture certainly did its part,” Deck said. “What we see looking back in history is the first quarter tends to be good in Arkansas and we really need agriculture to be a big contributor in the first quarter. We also see that our growth rates tend to be the highest in the first quarter.”
Last year the state’s GDP grew 1.5 percent, hampered by a first quarter in 2015 that saw GDP shrink 4.7 percent. GDP grew 4.8 percent in 2015’s best quarter.
While Arkansas can certainly claim a better 2016 Q1, with 3.9 percent growth, Deck said it’s not necessarily a sign of any underlying, transformational economic shifts.
“The Arkansas economy did not structurally change all that much from the first quarter of last year to the first quarter of this year. We did see some continued job losses from the Fayetteville shale and the mining sector but really when you try to point to how is the economy shifting…we don’t see other sectors that are important to us whether its retail, supply chain, or education and healthcare changing all that much,” said Deck.
Arkansas’s first place finish for GDP growth is a close one too. Oregon and Washington also experienced 3.9 percent growth. North Dakota fell on the opposite end of the spectrum with its GDP shrinking 11.4 percent.
Growth by sector
Durable-goods manufacturing: -0.16
Nondurable-goods manufacturing: 0.26
Wholesale trade: 0.15
Retail trade: 0.45
Transportation and warehousing: -0.25
Finance and insurance: 0.04
Real estate and rental and leasing: 0.07
Management companies and enterprises: 0.23
Administrative and waste management services: -0.03
Healthcare and social assistance: 0.38
Arts, entertainment, and recreation: 0.01
Accommodation and food services: 0.04
Other services, except government: -0.02