In the latest report on state-level GDP, the U.S. Bureau of Economic Analysis reported that Arkansas’ economy contracted at a 5.0% annual rate in the first quarter, the same rate as the U.S. That was also the median growth rate among states. GDP declined in all 50 states, with growth rates ranging from -1.3% in Nebraska to -8.2% in New York and Nevada.
Over the course of 2018 and 2019, Arkansas GDP growth averaged 1.9% compared to the U.S. average growth rate of 2.4%. Arkansas growth rate had exceeded that of the U.S. in the second half of 2019. Accordingly, year-over-year increase for Arkansas is slightly higher than the U.S.: +0.5% versus +0.3%.
The breakdown of GDP by sector shows that although Arkansas contracted at the same rate as the U.S., the composition of the decline was somewhat different. Arkansas benefited from relatively strong growth in Construction and Management of Companies and Enterprises. Manufacturing contributed more to Arkansas decline than to the U.S. for two reasons: Manufacturing represents a larger share of the state’s output and both durable goods and nondurable goods manufacturing declined more sharply in Arkansas. In sectors considered most-affected by pandemic-related shutdowns (e.g. Retail Trade, Health Care, Accommodation & Food Services, etc.), Arkansas’ declines tended to be smaller than the national average.