Arkansas GDP, personal income up in the third quarter of 2025

Arkansas’ third-quarter 2025 gross domestic product (GDP) was up 5.8%, the third highest among the 50 states, trailing Kansas at 6.5% and South Dakota at 6.3%, according to Friday’s state GDP report from the U.S. Bureau of Economic Analysis (BEA).

Trailing behind Arkansas were Connecticut, North Carolina, and Pennsylvania at 5.6%.

The state’s personal income grew at a rate of 3.1% in the quarter, above the 1.2% in the second quarter, but well below the 7.6% in the third quarter of 2024.

Arkansas’ GDP growth in the third quarter was driven primarily by gains in manufacturing, trade, and healthcare, according to the BEA report. Following are the top five growth sectors in Arkansas during the quarter.
• Manufacturing: up 1.12%, with durable goods manufacturing up 0.89%, and non-durable goods up 0.23%
• Wholesale trade: up 0.74%
• Retail trade: up 0.72%
• Healthcare and social assistance: up 0.5%
• Utilities: up 0.45%

The somewhat volatile agriculture, forestry, fishing and hunting sector was up 0.37%, well below the 2.05% gain in the third quarter of 2024. Sectors with the biggest declines were construction (down 0.17%) and government/government enterprises (down 0.09%).

“Durable-goods manufacturing continues to make a major contribution to Arkansas’ economy, led by steel and aerospace-aviation, including national defense-related industries,” noted Greg Kaza, an economist and executive director of the Arkansas Policy Foundation. “Quarterly state-level real GDP reports from BEA are relatively recent, dating to the first decade of the 21st century. Until 2018, Arkansas’ durable goods manufacturing sector appeared only once in a quarterly top 10 BEA state ranking. Since 2019, Arkansas’ durable goods sector has appeared in the top 10 in multiple quarters.”

The U.S. real GDP rose at an annual rate of 4.4% in the third quarter, up slightly from the previous estimate of 4.3%. The GDP rose 3.8% in the second quarter.

PERSONAL INCOME SHIFT
Arkansas’ personal income gain of 3.1% was above the 1.2% growth in the second quarter but well below the 7.6% gain in the third quarter of 2025. The state’s personal income in the third quarter grew $1.489 billion, down from $3.342 billion in the same quarter of 2024.

Compared to Arkansas’ contiguous states, Arkansas trailed only Tennessee at 4.5%. Mississippi also had personal income growth in the third quarter of 3.1%.

Contributing to the 3.1% personal income growth in Arkansas were net earnings (up 1.75%), dividends, interest, and rent (up 0.16%), and transfer receipts (up 1.22%). Transfer receipts include social security, Medicaid, Medicare, unemployment insurance, and other government benefit programs.

“Personal income increased in all 50 states and the District of Columbia in the third quarter of 2025,” noted the BEA report. “Current-dollar personal income increased at an annual rate of 3.3 percent and ranged from 6.3 percent in Kansas to 0.1 percent in Louisiana.”

NATIONAL NOTES
Following are national details from Friday’s BEA report on state GDP and personal income.

Real GDP increased in all 50 states in the third quarter of 2025. Real GDP increased at an annual rate of 4.4% nationally and ranged from 6.5% in Kansas to 0.4% in North Dakota.

Information, finance and insurance, and professional, scientific, and technical services were leading contributors to growth in real GDP nationally. The segments were leading contributors to real GDP growth in nearly half the states.

Durable-goods manufacturing increased in all 50 states and the District of Columbia and was the leading contributor to growth in 13 states including Arkansas and Connecticut, the states with the third- and fourth-largest increases in real GDP, respectively.

Agriculture, forestry, fishing, and hunting increased in 34 states and was the leading contributor to growth in Kansas and South Dakota, the states with the first- and second-largest increases in real GDP, respectively.

Earnings increased 3.6% nationally, ranging from 7.3% in Iowa and South Dakota to 0.7% in Oklahoma.