Report: Arkansas business conditions better in October, tariffs a concern

Arkansas’ Business Conditions Index rose from 48.8 in September to 54.2 in October, and the Mid-America Index rose from 49.8 in September to 50.5 in October, according to the Creighton University Mid-America Business Conditions Index.

The index, which measures economic conditions in nine states in middle America, uses the same methodology as the U.S. Institute for Supply Management and ranges between 0 and 100 with 50.0 representing growth neutral.

Following are Arkansas components from the October index: new orders at 54.2; production at 53.5; delivery lead time at 60.7; inventories at 54.0; and employment at 50.6. According to the latest published U.S. Bureau of Labor Statistics data, the state’s involuntary layoff rate for July 2025 was 1.2%, compared to 1.3% for July 2024.

“Creighton’s latest survey indicates that the regional manufacturing economy continues to move essentially sideways with elevated wholesale inflation,” said Ernie Goss, director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business. “Supply managers reported weakness in both imports and exports along with higher prices for imported goods.”

Following are key points noted in the report.

• The overall Mid-America Business Conditions Index climbed above growth neutral.
• The regional manufacturing sector shed jobs for the seventh straight month.
• For the week ending on Oct. 18, the insured unemployment rate for the region stood at 0.7%, compared to 0.6% for the same period in 2024.
• On average, supply managers reported that tariffs had increased the prices of inputs that their firm purchased by 7.9% in 2025.
• Approximately, 53% of supply managers that purchased inputs from abroad indicated that they had re-shored a portion of purchases from abroad.
• In the October survey, only 35% of supply managers agreed with President Donald Trump’s tariff policy. As stated by one supply manager, “While I think some of the tariffs were probably justified, the process in which they were implemented was haphazard at best.”

Looking ahead six months, economic optimism as captured by the October Business Confidence Index, increased to a “frail” 42.2, up from 38.2 in September, according to Goss’ report.

“Concerns regarding tariffs, inflation and slowing business activity restrained supply managers’ economic expectations,” Goss said. “Only 21.1% of supply managers expect rising economic conditions for their firm over the next six months.”

The Creighton Economic Forecasting Group has conducted the monthly survey of supply managers in nine states since 1994 to produce leading economic indicators of the mid-America economy. States included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.