Simultaneously with the release of second quarter Personal Income, the BEA also released new data for state GDP growth. As was the case with personal income, the comprehensive revisions to past data are more significant than the newly-reported second-quarter statistics.
The data for 2024:Q2 showed Arkansas GDP growing at an annual rate of 1.5%, compared to a 3.0% rate for the U.S. The news release from the BEA reported that GDP “increased in 49 states and the District of Columbia in the second quarter of 2024, with the percent change ranging from 5.9 percent at an annual rate in Idaho to –1.1 percent in Alaska.
The table below shows a breakdown of Arkansas and U.S. GDP growth by sector. Not surprisingly, the volatile agriculture component accounts for more than the difference between U.S. and Arkansas growth rates. Both nationally and here in Arkansas, growth in manufacturing as well as finance, real estate, professional services, and health services contributed notably to GDP growth.
Data Revisions
The revisions to GDP over the past five years are of greater interest than the most recent quarterly growth rate. As shown in the figure below, the upward revisions to GDP growth—particularly for Arkansas—are far larger than the most recent quarterly uptick. The revised data for Arkansas show stronger growth in 2020 and 2021 than previously indicated, and the brief contraction in the first half of 2022 is now estimated to have been smaller. The cumulative result of the revisions was to raise Arkansas GDP by 2.7% as of the first quarter of 2024. The U.S. data were also revised higher, but only by 1.3% as of the first quarter.
The revisions included higher estimates for all goods-producing sectors in Arkansas, but were generally downward revisions for some of the fastest-growing service sectors (including Education, Health Care and Accommodation & Food Services).
The two sectors with the largest upward revisions were Agriculture, etc., and Durable Goods Manufacturing. The upward revision for Agriculture more than doubled the originally-published estimate. The most important change was that the previously-reported decline in the first half of 2023 was revised to be considerably smaller.
The other sector with a substantial revision was durable goods manufacturing. In this case, the revision shows much stronger growth in 2020-21, with the higher level of output being maintained in 2022 and 2023.
The net result of the new quarterly data, along with the revisions, is that Arkansas GDP in the second quarter was cumulatively 13.9% higher than it was in 2019:Q4. Cumulative growth for the U.S. over the same time period amounted to 10.7%.