Arkansas Economic Development Institute

Posts tagged: Gross Domestic Product (GDP)

Arkansas GDP – 2016:Q4

By , May 11, 2017 4:59 PM

New data on state-level GDP was published this morning by the Bureau of Economic Analysis.  In the fourth quarter, Arkansas GDP  expanded at an annual rate of 0.5%, well below the nationwide average of 1.9%.  Arkansas growth rate ranked #45 of the 50 states.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

First-published estimates of GDP are based on incomplete data and are subject to significant future revision as more information becomes available, so the relatively low growth rate in the second quarter should not necessarily be cause for alarm.  However, today’s release also included revisions to data for 2013 to-date.  For Arkansas the revisions were negative and substantial:  The cumulative revision to the level of real GDP in 2016:Q3 amounted to 2.1%.  The newly revised data show recent growth rates of GDP to be in the range of less than 1%, compared to the 2%-3% range indicated by previously published data for 2016.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Annual Data
Today’s report also represents the first estimate of the state’s GDP for 2016 as a whole.  On an annual basis, the growth rate for Arkansas’ GDP was 0.8%, compared to 1.5% for the U.S.   Arkansas’ growth rate has fallen short of U.S. growth since 2013, with the gap particularly wide in 2015 (0.2% vs. 2.6%).

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Growth by Sector
The table below details growth by sector for Arkansas and the U.S.  The relative weakness of Arkansas’ growth is clearly concentrated in goods-producing sectors.  Low energy prices have depressed mining activity both nationwide and in Arkansas.  Durable goods manufacturing growth has been positive nationwide, but manufacturing growth for both durables and nondurables has been negative here in Arkansas.   Construction activity has also been relatively weak in Arkansas.

Service providing sectors in Arkansas have performed better, in both absolute and relative terms.  Although the one-quarter growth rates in Arkansas for 2016:Q4 are generally below national averages, year-over-year measures of service sector growth compare more favorably to national growth rates.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

Arkansas GDP – 2016:Q3

By , February 2, 2017 3:35 PM

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.

GDP-map-2016Q3

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

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

Source: U.S. Bureau of Economic Analysis

Arkansas GDP – 2016:Q2

By , December 7, 2016 4:51 PM

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

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

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, Quarterly GDP by State

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%.

Metro Area GDP – 2015

By , September 27, 2016 4:55 PM

New data on metropolitan area GDP were published by the Bureau of Economic Analysis last week.  For the metro areas in Arkansas, the news was decidedly mixed.  Only one of Arkansas’ metro areas — Fayetteville-Springdale-Rogers — had GDP growth in excess of the national average for metro areas:  Growth in Northwest Arkansas was reported at 4.4%, compared to 2.5% for the aggregate of all U.S. metro areas.  At 2.4%, Jonesboro’s growth rate was near the national average.  At the other end of the scale, GDP was reported to have contracted in three metro areas, with losses in Hot Springs and Pine Bluff reported at -3.0%.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The data for a single year do not always reveal the underlying growth trend.  As shown in the figure below, for example, the contraction in Hot Springs interrupted a series of years with relatively robust growth.  Even after declining 3% in 2015, GDP in Hot Springs was up 12.7% from it’s pre-recession level in 2007.  Over the same period, Fayetteville was the fastest-growing metro, with cumulative growth of 28.5%.  At the other end of the scale, GDP in Pine Bluff was down nearly 14% from its 2007 level.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Another caveat to the interpretation of the latest data:  The figures for 2015 are considered to be “advance estimates,” subject to considerable future revision.  The data release last week included revisions to the data for 2014, which were sizable in some cases.  In fact, for four metro areas (Hot Springs, Little Rock, Memphis, and Texarkana) even the direction of GDP change in 2014 has now been revised.  The update to Texarkana data is particularly large: having been originally estimated at -1.0%, GDP in 2014 is now reported to have increased at a 1.6% rate.

Source: Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The revisions to 2014 data show that the new data for 2015 should be interpreted with caution.  The multi-year trends in the data are revealing, but the latest reading on annual growth rates may look quite a bit different when the data are revised a year from now.

Arkansas GDP Growth – 2016:Q1

By , July 27, 2016 4:41 PM

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

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

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

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

Metro Area GDP

By , September 24, 2015 4:34 PM

Yesterday, the Bureau of Economic Analysis released new statistics on GDP for the nation’s metropolitan areas.  The BEA reported that the average growth rate for U.S. metro areas in 2014 was 2.3%.  Among metro areas that cover parts of Arkansas, only Fayetteville (at 3.1%) exceeded that average.  In fact, five of the state’s eight metro areas showed negative growth in 2014.  Pine Bluff experienced the largest contraction, -3.0%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Over the five year period since the trough of the 2008-2009 recession, Arkansas’ metro areas have shown a wide range of growth rates.  From 2009-2014, Fayetteville’s GDP expanded by 25.8% and Hot Springs’ by 20.8%.  At the other extreme, GDP in Pine Bluff has declined by 8.5%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The newly-released statistics are preliminary and incomplete, and are therefore subject to future revision.  As shown in the table, as well as in the figure below, revisions to GDP growth rates can be substantial.   For example, 2013 GDP growth for Hot Springs was revised upward from 1.9% to 4.5%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The BEA report also included information on per capita GDP, which might be considered a better indicator of economic performance (because it accounts for differences in population growth).  Statewide, GDP per capita in 2014 was $37,334 (in 2009 inflation-adjusted dollars), amounting to 75.5% of the U.S. figure of $49,469.  Little Rock had the highest per capita GDP, but at $48,773, still fell slightly below the national level.  Pine Bluff had the lowest per capita GDP, $29,238 or 59.1% of the U.S. average.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Arkansas GDP in 2014

By , June 10, 2015 1:22 PM

State and regional GDP data for 2014 were released by the Bureau of Economic Analysis this morning.  Real GDP growth from 2013 to 2014 was 0.8% for Arkansas, compared to 2.2% nationally.  Arkansas ranked 38th among the 50 states in overall growth.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

The BEA News Release noted that professional, scientific, and technical services was the largest contributor to U.S. real GDP, and that nondurable goods manufacturing and real estate and rental and leasing were also strong growth components.  In Arkansas, professional services and nondurable goods manufacturing contributed positively to growth, but not by as much as the nationwide figures.  On the other hand, mining was a strong component of Arkansas’ growth, as was management of companies and enterprises.  Week sectors of the Arkansas economy included utilities, construction, real estate, and agriculture, etc.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Although the data were not subject to major definitional changes, revisions to underlying source data turned out to be substantial for Arkansas.  Growth rates over the past decade were generally revised downward, with the exceptions being 2007 and 2011.   The magnitude of revisions to previous years’ growth rates serves as a reminder that the new data for 2014 are considered “advance” estimates and will be subject to revision next year.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Since the trough of the recession in 2009, real GDP in Arkansas experienced cumulative growth of 9.6%, compared to 10.1% for the U.S.   As shown in the following figure, growth in Arkansas was above the national average in 2010 and 2011, but has subsequently lagged behind.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

 

Metro Area GDP in 2013

By , September 16, 2014 11:44 AM

New data on GDP growth in metropolitan areas was released this morning by the Bureau of Economic Analysis.  The data show robust growth in Northwest Arkansas, but rather sluggish growth in other parts of the state.  In June, data on real GDP growth by state showed that Arkansas’ economy grew at a rate of 2.4% in 2013, well above the national average of 1.8%.  The metro data show that growth to be concentrated in the Fayetteville-Springdale-Rodgers Metropolitan Statistical Area (MSA), which grew at a 5.6% rate.  Fort Smith and Hot Springs grew slightly faster than the national average for metropolitan areas, while Jonesboro and Little Rock expanded at growth rates of less than one percent.  Memphis, Pine Bluff and Texarkana each showed negative growth from 2012 to 2013.  Out of the total of 381 MSAs in the United States, only Fayetteville, Fort Smith and Hot Springs ranked above the median growth rate.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Although the metro GDP data are based on the best information presently available, the figure for 2013 will be subject to future revision.  As shown in the table, data for 2011 and 2012 were revised substantially since the last metro GDP report a year ago.  Data for Northwest Arkansas were subject to particularly large revisions.  Previously published data had shown growth rates of 0.1% and 0.5% in 2011 and 2012.  The revised data show growth rates of 4.4% and 1.9%.  At the other end of the scale, growth rates for Texarkana were revised downward rather sharply.

The new data also report on GDP per capita, which might be considered a better indicator of economic performance (because it accounts for differences in population growth).  Statewide, GDP per capita in 2013 was $39,111 in 2013 (inflation-adjusted 2009 dollars) — amounting to 79.6% of the national average.  As shown in the chart below, there are some significant differences in GDP per capita among the state’s metro areas.  Little Rock is the only metro area with GDP per capita exceeding the national average in 2013 (102%).  Memphis and Fayetteville stood at 90% and 80% of the national average, respectively.  The lowest per capita GDP was for Hot Springs:  the 2013 figure of $34,918 amounts to only 59 percent of the national average GDP per capita.  Since the recession trough in 2009, real GDP per capita has increased substantially in Fayetteville (+13.8%) and Hot Springs (+12.3%). It has increased more slowly in Fort Smith (+6.0%),  Jonesboro (+4.7%), Pine Bluff (+3.5%) and Memphis (+0.4%).   Little Rock and Texarkana have seen negative growth in real GDP per capita since 2009 (-2.0% and -1.5%, respectively).

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Quarterly GDP

By , August 21, 2014 4:16 PM

The Bureau of Economic Analysis has released yet another “prototype” data set for state-level statistics.  Earlier this month we saw, for the first time, estimates of personal consumption spending by state.  Yesterday, the BEA introduced state-level statistics on quarterly GDP.  For some time, we have had estimates of annual GDP for states, but annual averages can only reveal so much about the short-term ups and downs that characterize an economy.  Access to quarterly estimates provides additional detail for assessing the economy’s dynamics.

The chart below compares quarterly growth rates for U.S. GDP with the new quarterly measure of Arkansas GDP.*  The quarter-to-quarter changes for Arkansas show more volatility than the national average.  This is partly due to statistical measurement issues, but also due to the fact that the U.S. average is naturally smoother as increases in one region tend to offset decreases in others.  Overall, as with other measures of economic activity, Arkansas economy has followed a trajectory similar to the U.S. as a whole.  The data also corroborate some previously established patterns:  Arkansas experienced a sharp recovery from the recession in late 2009 and early 2010, but then fell into a pattern of relatively sluggish growth.   There were even two episodes — late 2010 and mid 2012, where Arkansas experienced two consecutive quarters of negative output growth.  The pace of the expansion picked up in 2013, particularly early in the year.

Source:   Bureau of Economic Analysis*

Source: Bureau of Economic Analysis*

The most recent observations released as a part of the new prototype series were for the fourth quarter of 2013.  In Arkansas, fourth quarter GPD increased at a seasonally adjusted annual rate of 3.0% — slightly higher than the U.S. average of 2.8%.  Among the 50 states, Arkansas growth rate ranked #22.  As shown in the table below, growth was positive in most sectors.  Output in manufacturing — especially non-durable goods — showed particular strength.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

# # #

Note:  Data used to generate historical growth rates use an interpolated estimate for the fourth quarter of 2007.  Payments associated with the purchase of Alltel Communications distort the quarterly personal income statistics which are used to calculate quarterly GDP estimates.  The adjusted GDP data is substituted to smooth out what would otherwise look like an excessive growth/contraction pattern at the end of 2007 and beginning of 2008.

Arkansas GDP in 2013

By , June 11, 2014 2:52 PM

The Bureau of Economic Analysis announced this morning that Arkansas GDP growth in 2013 was 2.4%, up from a revised growth rate of 1.1% in 2012.  Arkansas’ growth rate was well above the national average of 1.8%, and ranked #16 among the 50 states. gsp_0614

Today’s report included a comprehensive set of revisions that affected the data going back to 1997. Although Arkansas’ growth rate in 2012 was revised downward, the revisions generally paint a picture of stronger long-term growth for the state.  As shown in the figure below, the immediate post-recession years of 2010 and 2011 saw much stronger growth than previously estimated.  Growth in 2003 through 2008 was also revised upward.  Cumulatively Arkansas GDP growth is now reported to have increased by 28.3% over the 10 years from 2002-2012, up from a previously-reported total of 16.5%.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

After the data revisions, Arkansas growth over the past several years is now estimated to have exceeded that of the U.S. as a whole.  The 2009 drop in output was previously estimated to have been smaller than the national average, but it is now reported to have been about the same (-2.7%).  Nevertheless, stronger growth in the decade before the recession — as well as in 2010 and 2013 — result in a significant cumulative improvement for Arkansas.  In per capita terms, Arkansas real GDP (in 2009 dollars) increased from $33,828 in 2003 to $39,111 in 2013 (an increase from 73.7% of the national average to 79.6%).

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

Over half of Arkansas’ growth in 2013 came from natural resource sectors:  Agriculture, forestry, fishing and hunting contributed over half of a percentage point to total growth and Mining accounted for more than a full percentage point.  The BEA news release noted that these sectors figured prominently in national growth patterns.  The Agriculture, etc. component contributed positively to growth in 49 states plus the District of Columbia.  Mining “was not a significant contributor to real GDP growth for the nation,” but it did boost the growth rates of some of the fastest growing states in the nation.  For example, mining accounted for 3.61 percentage points of North Dakota’s 9.7 percent growth.

Some sectors in Arkansas’ economy remain relatively weak, however.  Construction had a positive contribution to growth nationwide, but subtracted from growth in Arkansas.  Manufacturing in Arkansas showed essentially zero growth over the year, while it added 0.4% to the U.S. growth rate.

Source:  Bureau of Economic Analysis

Source: Bureau of Economic Analysis

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