Arkansas GDP Up 1.3% In 2012

Arkansas’ economy grew an estimated 1.3% in 2012, with growth in manufacturing, utilities and trade responsible for most of the increase. The increase is better than the 0.7% gross domestic product (GDP) increase in 2011, but below the 2.6% gain in 2010.

The U.S. Bureau of Economic Analysis reported Thursday (June 6) that real GDP was up in 49 states and the District of Columbia during 2012. Nationwide, durable–goods manufacturing, finance and insurance, and wholesale trade were the leading contributors to economic growth. U.S. real GDP by state grew 2.5% in 2012 after a 1.6% increase in 2011.

Connecticut ranked last in terms of GDP improvement between 2011 and 2012 (down 0.1%). North Dakota was first in terms of GDP improvement with a 13.4% increase. Texas was second with a 4.8% increase.

UALR economist Michael Pakko noted on his Arkansas Economist blog that revisions to prior year’s state GDP numbers revealed that Arkansas saw improvements in its standing for the years 2009-2011.

“The cumulative effect of today’s revisions was to raise the estimated total of Arkansas real GDP by 1.3% as of 2011. The 1.3% growth for 2012 comes on top of that upwardly revised measure of economic activity in 2011,” Pakko said.

ARKANSAS DATA
GDP in Arkansas during 2012 is estimated at $93.892 billion, ahead of the $92.684 billion in 2011. Arkansas’ year-over-year gain ranked 38th among the 50 states.

Arkansas’ per capita GDP in 2012 was $31,837, up slightly from the $31,547, but still below the pre-recession per capita GDP of $32,054 in 2007. Per capita real GDP ranged from a high of $61,183 in Delaware to a low of $28,944 in Mississippi. Per capita real GDP for the U.S. was $42,784.

The mining sector in Arkansas during 2012 saw a 0.19% dip in activity. While the BEA report does not provide details on what causes ups and downs in specific sectors, it is possible the mining sector decline is connected to reduced activity in Arkansas’ Fayetteville Shale Play. There are about 15 rigs in the Fayetteville Play – located in north and central Arkansas – compared to more than 55 rigs about five years ago, and down from 22 a year ago. The monthly average for natural gas rigs in Arkansas during 2010 was 39.

Arkansas’ information sector was down 0.03% in 2012, health care services fell by 0.04% and the “professional, scientific and technical services” fell by 0.25%.

The state’s manufacturing sector saw a 0.37% gain during 2012. The utilities sector was up 0.26%, wholesale trade was up 0.32% and retail trade was up 0.28% during 2012. The state’s agriculture, forestry, fishing, and hunting sector was up 0.15%, and far better than the 0.4% decline seen nationwide in the sector.

NATIONAL SECTOR DATA
• Durable–goods manufacturing was the largest contributor to U.S. real GDP by state growth in 2012. This industry increased 9.1% in 2012, after increasing 6.8% in 2011.

• Finance and insurance was also a leading contributor to U.S. real GDP by state growth. Finance and insurance increased 3.6% in 2012, rebounding from a 0.6% decline in 2011.

• Wholesale trade contributed to real GDP growth in 48 states and the District of Columbia. Wholesale trade increased 4.8% in 2012, after increasing 3% in 2011.

• Although mining was not a major contributor to real GDP growth for the nation, it was a large contributor in North Dakota, West Virginia, and Texas. In North Dakota, the fastest growing state in 2012, mining contributed 3.26 percentage points to real GDP growth of 13.4%.

• Construction turned up in 2012, after eight consecutive years of contraction; increasing by 3.2% nationally. This industry contributed to real GDP growth in 43 states and the District of Columbia.

• In contrast, agriculture, forestry, fishing, and hunting subtracted from real GDP growth in 2012. This industry subtracted from real GDP growth in six of eight BEA regions and in 35 states.

ARKANSAS GDP
2012: $93.892 billion
2011: $92.684 billion
2010: $92.075 billion
2009: $89.776 billion