New forecasts from the USDA’s National Agricultural Statistics Service (NASS) project sizable increases in Arkansas agricultural output in 2012.   Output figures from 2011 and projections for 2012 are summarized in the table below.

Source: USDA National Agricultural Statistics Service.

• Corn production, in particular, is expected to be up sharply from last year.  The increase is attributable to increases in both the number of acres harvested (+23%) and the yield per acre (+23%).
• Cotton production is expected to fall slightly, in spite of a 7% increase in yield.  The number of acres expected to be harvested is down 12%.
• Rice production is expected to be up 18%, with gains coming from increases in both acreage (+11%), and yield (+6%).
• Sorghum output is also expected to benefit from higher acreage (+22%) and yield (+11%).
• Soybean production is expected to be essentially unchanged from last year, with acreage down 2% and yield up 3%.

These statistics suggest that damage from this summer’s drought and from Hurrican Isaac are not as severe as many had feared — at least in Arkansas.  Nationwide, the drought has had a larger impact.  For example, U.S. corn production is forecast to be down 13% and soybean production down 14%.  (Crop Production, September 2012).

The Bureau of Economic Analysis announced this morning that the recent acceleration in national GDP growth was reflected second quarter statistics for the 50 states:  Growth rates ranged from 2.5% in Delaware to 6.0% in Texas.  Arkansas’ growth rate was 4.4% — the tenth-highest growth rate in the nation.  As part of a comprehensive revision of the state GDP data (more below), Arkansas first quarter growth rate was also revised up from 0.0% to 2.0%.  From 2017:Q2 to 2018:Q2, Arkansas GDP growth has been 1.7%, compared to 2.9% for the U.S.

Source: Bureau of Economic Analysis

Agriculture was by far the largest contributor to Arkansas’ GDP growth, accounting for 1.27 percentage points of the state’s 4.4% growth rate.  Other sectors adding significantly to growth included Real estate, Information and Utilities.  Durable goods manufacturing was also a notable area of strength for both Arkansas and the U.S.  The only negative contributors to Arkansas growth were Finance and insurance, Retail trade and Nondurable goods manufacturing.

Source: Bureau of Economic Analysis

Comprehensive Data Revisions:
This morning’s data release incorporated the results of the BEA’s comprehensive update of GDP by state, incorporation more complete and detailed source data than was previously available.  The base year for price adjustment was also changed from 2009 to 2012.  For Arkansas, the revisions had the effect of lowering the level of GDP estimates for much of the past decade.  The revised data show a somewhat sharper downturn during the “Great Recession” of 2008-09, and also show sharply slower growth over the period 2013 through 2017.  From 2013:Q1 through 2017:Q4 the revised data show a growth rate of 0.5% compared to 1.0% in the previously published data (annual rates).

Source: Bureau of Economic Analysis. Note – Previously published data have been converted from the 2009 base year to the new benchmark of 2012.

For more recent periods, the data revisions mark something of an improvement.  Quarterly growth rates for Arkansas were revised up from 0.0% to 2.0% for the first quarter of 2018, and up from 2.5% to 2.7% for the fourth quarter of 2017.

Source: Bureau of Economic Analysis

Although the newly-revised data give cause for reassessing the strength of Arkansas’ economic expansion over the past several years, the latest readings provide reason to be optimistic that the recent pick-up in GDP growth nationwide is also being enjoyed here in Arkansas.

State-level GDP data for the first quarter of 2018 showed zero growth in Arkansas, placing the state 49th among the 50 states (North Dakota experienced a decline of 0.6%).  The comparable value for U.S. GDP growth in Q1 was 1.8%.

Source: Bureau of Economic Analysis

Over the past four quarters Arkansas GDP expanded by 0.7%, well-below the U.S. average of 2.6%.  As shown in the figure below, Arkansas growth rate has lagged the nation since at least 2014.  From the beginning of 2014 through 2018:Q1, the growth rates of Arkansas and the U.S. have averaged 1.0% and 2.4%, respectively.

Source: Bureau of Economic Analysis

The breakdown of GDP growth by sectors shows that Arkansas’ weakness was largely attributable to the Agriculture, forestry, fishing, and hunting component, which subtracted nearly 0.7 percentage points from overall growth.  Other sectors dragging down Arkansas growth included Wholesale trade and Government.   Several sectors contributed positively to growth, including Manufacturing, Retail trade, Finance and Real estate, and Health Care.

Source: Bureau of Economic Analysis

The slow growth of Arkansas GDP in recent quarters is cause for some concern, but the initial quarterly estimates are subject to considerable revision.  Just six months ago the data were showing Arkansas outpacing the nation with a four-quarter growth rate of 3.6% (2016:Q3-2017:Q3).  The latest information show Arkansas growth rate to have been only 1.4% over that same period.

Later this week (July 27) the BEA will release statistics from the latest comprehensive update for national GDP, but the state-level revisions will not be available until the next quarterly release date on November 14.   Until then, this latest release represents the best information available, and it suggests that the Arkansas economy got off to a relatively slow start in 2018.

In the latest report on state-level GDP, Arkansas registered an increase of 2.5% (seasonally adjusted annual rate).  The fourth quarter increase was slightly lower than the comparable national-average figure of 2.7%, and ranked #26 among the 50 states.  The Bureau of Economic Analysis reported that some of the key contributors to GDP growth in the fourth quarter were mining and construction (particularly in the Texas, the fastest-growing state); as well as durable goods manufacturing and professional, scientific and technical services.  On the other hand, agriculture, forestry, fishing, and hunting decreased for the fifth consecutive quarter, dampening growth in the Plains states in particular.

As shown in the table below, many of the sectors that showed notable growth nationwide also contributed to Arkansas’ overall growth rate.  In addition, nondurable goods manufacturing played a role in boosting Arkansas’ relative growth and agriculture, etc., made a positive contribution.

Source: Bureau of Economic Analysis

Data Revisions
Today’s release also included revisions to previously published data for 2014:Q1 to 2017:Q3.  The newly updates, which incorporate new and revised source data, resulted in a considerable reduction in Arkansas’ reported growth over the past year.

Estimates of state-level GDP growth for the third quarter of 2017 showed Arkansas expanding at an annual rate of 2.0%.  In its news release, the Bureau of Economic Analysis noted that GDP “increased in every state and the District of Columbia in the third quarter.”  Although a 2% growth rates is in line with recent trend growth for both Arkansas and the nation, Arkansas’ growth rate lagged the 3.4% national average for the third quarter, and ranked #43 among the 50 states.

Arkansas’ third quarter growth rate represented a deceleration from the rapid expansion reported for the previous three quarters.  Recent revisions had shown that Arkansas GDP growth had averaged 4.1% from 2016:Q4 through 2017:Q2.  On a year-over-year basis, the third quarter figure — combined with the previous three quarters —  was up 3.6% compared to the nation’s 2.2% rate.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The breakdown by sector suggests why Arkansas GDP growth slowed relative to previous quarters and relative to the national average.  The BEA reported that Finance and Insurance sector was a major contributor to growth nationwide; and at the other end of the spectrum, Agriculture, forestry, fishing and hunting showed its fourth consecutive quarter of decline.  Finance and insurance contributed positively to Arkansas’ growth rate, but represents a relatively small share of the state’s economy.  Meanwhile, agriculture represents a relatively large share, and the Arkansas economy has not escaped the brunt of that sector’s downturn.

Source: Bureau of Economic Analysis

The state-level GDP estimates are subject to considerable revision as additional information becomes available.  The next report, scheduled for May 4, 2018 will release revised statistics for the first quarter of 2014 through the third quarter of 2017.

Arkansas GDP increased at a 1.3% annual rate in the first quarter, slightly higher than the nationwide average of 1.2%.  Arkansas’ growth rate ranked #23 among the 50 states.  The Bureau of Economic Analysis reported that GDP growth was positive in 43 states and the District of Columbia.  Growth rates ranged from a high of 3.9% in Texas to a low of -4.0% in Nebraska.

Source: Bureau of Economic Analysis

Although Arkansas growth rate in the first quarter was above the national rate, GDP growth had been running below the national average in the second half of 2016.  As a result, the latest reading on year-over-year growth shows Arkansas up only 0.3% compared to 2016:Q1, with U.S. GDP up 1.9% over the same period.

Source: Bureau of Economic Analysis

In its news release, the Bureau of Economic Analysis reported that the nation’s growth rate slowed in the first quarter, with finance and insurance, retail trade, and agriculture, forestry, fishing, and hunting leading the deceleration.  As shown in the table below, Arkansas was an exception to the pattern of slow growth in agriculture, forestry, fishing and hunting.  The sector breakdown for Arkansas also showed relatively strong growth in nondurable goods manufacturing.  Sectors showing negative growth in the first quarter included retail trade and management of companies and enterprises.

Source: Bureau of Economic Analysis

The Bureau of Economic Analysis announced this morning that Arkansas real GDP grew at a 2.3% annual rate in the third quarter of 2016.  While this growth rate is roughly in line with prevailing trends, Arkansas’ growth lagged behind the nationwide rate of 3.5%, ranking #41 among the 50 states.

Over the past four quarters, Arkansas’ growth rate has averaged 2.1%, compared to 1.6% for the entire U.S.

Source: U.S. Bureau of Economic Analysis

As shown in the table below, the patterns of growth rates across sectors are quite similar for Arkansas and the U.S.  Growth was relatively strong in Utilities, Finance and Insurance, and Administrative services.  Another sector to show encouraging growth was Durable Goods Manufacturing.  Arkansas’ agricultural output contracted in the third quarter; however, agricultural output shows substantial volatility from quarter to quarter.  Output in the mining sector was down across the board, reflecting continued weakness in oil and gas prices.

Source: U.S. Bureau of Economic Analysis

The Bureau of Economic Analysis announced this morning that Arkansas’ Gross Domestic Product (GDP) increased at a seasonally adjusted annual rate of 1.6% in the second quarter of 2016, following a revised growth rate of 4.4% in the first quarter.  Arkansas growth for the quarter exceeded the national average of 1.2%.  Compared to a year earlier, state GDP was up 2.4%.

Source: Bureau of Economic Analysis, Gross Domestic Product by State

As was the case in the first quarter, Arkansas’ growth rate was boosted by a substantial increase in the category of Agriculture, forestry, fishing and hunting.  Other sectors showing strong growth included Transportation and warehousing, Management of companies and enterprises, and Utilities.  Reflecting continued weakness in natural gas prices, output in the mining sector was once again down sharply.  Other sectors contracting in the second quarter included Construction; Educational services; and Arts, entertainment, and recreation.

Source: Bureau of Economic Analysis, Gross Domestic Product by State

Today’s news release also included revisions to previously published data.  The revised figures show slower growth in Arkansas over the past two years.  On a fourth-quarter over fourth-quarter basis, Arkansas GDP growth was revised from 2.5% to 2.3% for 2014, and revised from 1.4% to 0.0% for 2015.

Source: Bureau of Economic Analysis,Gross Domestic Product by State

Over the seven year period from the trough of the recession (2009:Q2) through the second quarter of 2016, Arkansas GDP growth has averaged 1.9%.

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.

Source: Bureau of Economic Analysis, Gross Domestic Product by State

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%.

Source: Bureau of Economic Analysis, Gross Domestic Product by State

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.

Source: Bureau of Economic Analysis, Gross Domestic Product by State

Arkansas’ GDP grew at an annualized rate of 1.6% in the fourth quarter of 2015, down somewhat from the 4.8% and 4.1% growth rates (revised) registered in the second and third quarters of the year.  The four quarter growth rate was 1.4% and the annual rate of change (2015 vs. 2014) was 1.5%.  The GDP data support a general assessment of Arkansas’ economy as having grown at a healthy (albeit not exceptional) pace over the past three years.

Source: Bureau of Economic Analysis

The table below shows growth rates by sector for 2015:Q4, along with annual growth rates for 2015. Several sectors expanded sharply at the end of 2015, including Construction, Nondurable goods manufacturing, Wholesale trade, and some service-providing sectors. The expansion of nondurable goods manufacturing was a welcome improvement, as were surges in the growth rates of Arts, Entertainment & Recreation and Other Services.  For the  year as a whole, growth was strongest in Agriculture, Construction, Wholesale & Retail Trade, some sub-categories of Professional & Business Services, and Health Services.

Source: Bureau of Economic Analysis

The report from the Bureau of Economic Analysis also included revisions to state GDP data for 2008-2014.  As shown in the figure below, growth rates for Arkansas GDP were revised sharply higher for 2013 and 2014.  The originally-reported growth rate for 2014 (0.8%) seemed particularly inconsistent with the strong employment growth recorded for that year. The revised figure (2.1%) is more consistent with other contemporaneous measures of state economic activity.  Viewed from a longer-term trend perspective, the latest GDP data suggest that Arkansas has been on a steady growth path since the end of 2012.

Source: Bureau of Economic Analysis