Report shows continued weakness in Arkansas’ manufacturing sector

Arkansas’ overall economy improved in December, but the state’s manufacturing exports are down almost 5% in the first three quarters of the year, according to the Creighton University Mid-America Business Conditions Index.

The index, which measures economic conditions in nine mid-America states, fell to 47.6 in December, the lowest level in 2025 and down from 49.5 in November. The index uses the identical methodology as the national Institute for Supply Management and ranges between 0 and 100 ,with 50.0 representing growth neutral.

“Creighton’s latest survey indicates that the regional manufacturing economy continues to move sideways to lower with the wholesale inflation gauge moderating,” 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, noted in the report. “Supply managers reported weakness in both imports and exports.”

Arkansas’ December Business Conditions Index was 52.2, up from 49.1 in November. The new orders components of the index was 42.8, an indication of future reduced activity.

“According to the International Trade Association (ITA), Arkansas manufacturing exports for the first three quarters of 2025, compared to the same period in 2024, fell from $4.4 billion in 2024 to $4.2 billion in 2025 for a 4.9% decline,” noted the report.

The nine-state region exported $69 billion in manufactured goods in the first three quarters of 2025, down 5.5% compared with the same period in 2024.

In the nine-state region, the December employment index was 44, down from 47.6 in November. December’s job reading was the ninth consecutive month the index fell below growth neutral and was the lowest reading since May 2024.

Following are other details from the Creighton report.
• Supply managers expect their salary to expand by 3% over the next 12 months, roughly equal to the rate of inflation.

• The December price gauge was unchanged from November’s 59.8, the lowest reading of 2025, and down from 62.9 in October.

“The regional inflation yardstick has moved into a range indicating that inflationary pressures are moderating at the wholesale level,” said Goss.

• Looking ahead six months, economic optimism, as captured by the December Business Confidence Index, increased to 50 from 47.4 in November.

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

• Recent retaliation from higher U.S. tariffs and trade restrictions pushed new export orders, or purchases from abroad, lower for the last six months. New export orders increased to a weak 47 from November’s 42.7.

• Approximately 37.5% of manufacturing supply managers reported opposing the 2025 tariff increases.

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.