Arkansas GDP growth rate falls in 2011

Arkansas’ GDP totaled $91.496 billion in 2011, up just 0.3% compared to 2010, with a decline in agricultural income the culprit for low growth, according to economist Michael Pakko.

The numbers released Tuesday (June 5) by the U.S. Bureau of Economic Analysis also revised 2010 GDP growth to 2.5%, up from the previous estimate of 2.3%. However, the estimated 1.5% decline in 2009 was revised to a deeper decline of 2.9%. Also, the 2011 GDP total is below the 2008 total, meaning Arkansas has yet to fully recover from economic activity prior to the U.S. recession.

Following are the revised Arkansas GDP figures for the past four years.
2011: $91.496 billion, up 0.3%
2010: $91.186 billion, up 2.5%
2009: $88.946 billion, down 2.9%
2008: $91.618 billion, up 0.3%

Arkansas economic sectors showing the best gains in 2011 were professional services (up 0.23%), health care (up 0.21%), durable goods manufacturing (up 0.18%), administrative and waste services (up 0.16%), and retail (up 0.13%).

The agri, forestry, fishing and hunting sector in Arkansas saw a 0.46% decline in 2011 compared to 2010.

The 2011 GDP for Oklahoma was $134.146 billion, up 1% compared to 2010. The 2011 GDP for Missouri was $216.099 billion, flat compared to 2010.

“Real gross domestic product (GDP) increased in 43 states and the District of Columbia in 2011,” noted the BEA statement. “Durable-goods manufacturing, professional, scientific, and technical services, and information services were the leading contributors to real U.S. economic growth. U.S. real GDP by state grew 1.5 percent in 2011 after a 3.1 percent increase in 2010.”

Real GDP by state is an inflation–adjusted measure of each state's production, wherever sold, according to the BEA.

Arkansas ranked 39th in terms of GDP percentage gain, down from the 24th spot in 2010. Oklahoma ranked 29th and Missouri was 43rd. The top five states in terms of percentage gain were:
North Dakota: 7.6%;
Oregon: 4.7%;
West Virginia: 4.5%;
Texas: 3.3%; and,
Alaska: 2.5%

Pakko, the chief economist and state economic forecaster with the Institute for Economic Advancement at the University of Arkansas at Little Rock, said poor weather gets a lot of the blame for depressing the agri industry in 2011. Pakko had previously predicted Arkansas’ 2011 GDP could hit 3% as the state and nation moves further away from the recession.

“Weather conditions in Arkansas during 2011 were suboptimal to say the least — spring storms and flooding, followed by summer heat and drought, were responsible for a sharp drop in farm incomes,” Pakko explained. “The good news is that weather is temporary, so the relative slowdown in Arkansas economic growth during 2011 is unlikely to be a persistent problem.”

The BEA report included the following observations on key U.S. sectors.
• Durable-goods manufacturing was the largest contributor to U.S. real GDP by state growth in 2011. This industry increased 7.9% in 2011, after increasing 17% in 2010.

• Professional, scientific, and technical services and information services were also leading contributors to U.S. real GDP by state growth. Professional, scientific, and technical services increased 4.9% in 2011, matching its 2010 growth rate.

• In contrast, several industries subtracted from real GDP growth in 2011. Real estate, rental, and leasing subtracted the most. This industry subtracted from real GDP growth in all eight BEA regions and in 40 states.

• Per capita real GDP by state in 2011. Per capita real GDP ranged from a high of $63,159 in Delaware to a low of $28,293 in Mississippi. Per capita real GDP for the U.S. was $42,070.