Arkansas GDP up 0.8% in the first quarter, ranks 5th in the nation

Arkansas’ real gross domestic product (GDP) was 0.8% in the first quarter, ranking the state fifth for growth among the 50 states. Personal income grew at an annual rate of 8.7%, which ranked Arkansas fifth in the nation.

Real gross domestic product decreased in 39 states in the first quarter of 2025, with the percent change ranging from 1.7% at an annual rate in South Carolina to a decline of 6.1% in Iowa and Nebraska, according to a Friday (June 27) report from the U.S. Bureau of Economic Analysis (BEA). Friday’s report is preliminary and subject to revision.

Arkansas ranked first in the third quarter of 2024 with 6.9% GDP growth, and ranked first in the fourth quarter of 2024 with 5.1% GDP growth. Arkansas’ first-quarter 2025 Real GDP was $151.27 billion, up from $150.974 billion in the fourth quarter of 2024 and above the $149.105 billion in the third quarter of 2024.

The top five for GDP growth are South Carolina (1.7%), Florida (1.4%), Alabama (1%), and Arkansas and North Carolina at 0.8% each.

Arkansas’ agriculture, forestry, and hunting sector grew 1.63%, which was the largest driver of GDP growth in the state. Other sectors posting gains included real estate/rental/leasing (0.39%), durable goods manufacturing (0.32%), information (0.27%), and utilities (0.23%). The wholesale trade sector posted the largest decline (down 0.63%), and construction (down 0.33%).

“Arkansas real GDP increased at an annual rate of 0.8% in 1Q-2025, led by gains in the following sectors: agriculture, forestry, fishing, and hunting; durable goods manufacturing; and information services,” said Greg Kaza, an economist and executive director of the Arkansas Policy Foundation. “Arkansas led states in agriculture, forestry, fishing, and hunting; and ranked second behind Alabama in durable goods manufacturing. The report underscores the importance of the agricultural, aviation and steel components of Arkansas’ economy.”

Personal income, in current dollars, increased in all 50 states in the first quarter of 2025, with the percent change ranging from 12.7% at an annual rate in North Dakota to 3.2% in Washington state. The top five for personal income growth are North Dakota (12.7%), South Dakota (11.4%), Mississippi (9.9%), South Carolina (9.1%), and Arkansas (8.7%).

Following are other details from the BEA report.
• Earnings increased in all 50 states with the percent change in earnings ranging from 13.5% in North Dakota to 0.1% in Washington state. Earnings increased in 22 of the 24 industries for which BEA prepares quarterly state estimates and was the largest contributor to growth in personal income in 28 states.

• Farm earnings was the leading contributor to increases in North Dakota, South Dakota, and Mississippi, the states with the three largest increases in personal income, due in part to government payments from the Emergency Commodity Assistance Program.

• In South Carolina, the state with the fourth-largest increase in personal income, construction was the leading contributor to the increase in earnings. In Oklahoma, the state with the fifth-largest increase in personal income, mining was the leading contributor to the increase in earnings.

• Transfer receipts increased in all 50 states, while growing 13.6% nationally. The percent change in transfer receipts ranged from 21.2% in Nevada to 9.1% in Florida. The increase in transfer receipts was due in part to an increase in Affordable Care Act premium tax credits and an annual cost-of-living adjustment for Social Security benefits.

• Property income increased in all 50 states, while growing 5.6% nationally. The percent change ranged from 7.8% in Idaho to 3.8% in Alaska.