The Bureau of Economic Analysis reported this morning that Arkansas GDP expanded in the first quarter at a 3.9% annual rate — the highest growth rate in the nation. At least in part, today’s report provides additional evidence of a strong Arkansas economy in the first part of 2016. However, the BEA news release pointed out that Arkansas’ growth rate was boosted by an extraordinarily strong growth in the sector of Agriculture, Forestry, Fishing, and Hunting. “This industry contributed 2.21 percentage points to the 3.9 percent growth in Arkansas.” In other words, overall growth would have amounted to only 1.7% had it not been for the contribution of agriculture.
From the first quarter of 2015 to the first quarter of 2016, Arkansas GDP grew by 3.6% — a notable increase from the trend growth rate of approximately 2% that had prevailed in recent quarters. Agriculture was not as significant a factor in the year-over-year growth rate, contributing only 0.6 percentage points to overall growth. So in the absence of agriculture, the state’s GDP growth would still have been 3.0%.
Besides the agricultural component, several sectors contributed to Arkansas GDP growth. In general, the strongest sectors in Arkansas were the same as those driving growth on the national level, including Construction, Retail Trade, Information, and Health Care. Nondurable goods manufacturing also contributed to growth for both the U.S. and Arkansas, while durable goods manufacturing contracted in the first quarter.