The Compass Report: Arkansas metro economic growth ranges from resilient to stable

Economic growth in Central and Northwest Arkansas continued to grow in the third quarter of 2025, with economic conditions in the Fort Smith and Jonesboro metros moderating or flat in some sectors, according to The Compass Report.

In the third quarter of 2025 (July – October) report, Central Arkansas received an “B+” grade, the Fort Smith metro had a “B-” grade, the Jonesboro area received a “B+” grade, and Northwest Arkansas had a “A-” grade.

The Compass Report is a partnership between the University of Arkansas at Fort Smith (UAFS) and Talk Business & Politics. First National Bank of Fort Smith is a sponsor of the statewide report.

Kendall Ross, UAFS associate vice chancellor of Economic and Workforce Development, and Kaitlyn Cavaness, an intern in the UAFS Center for Economic Development who helps compile, manage and review the data, are responsible for data collection and written analysis for the report.

The report measures four leading and four current economic indicators to provide a grade for a regional economy. The eight categories measured to determine The Compass Report grade in the Central Arkansas, Fort Smith and Northwest Arkansas areas are total nonfarm jobs, unemployment rate, building permits, sales tax revenue, manufacturing jobs, service sector jobs, construction jobs, tourism jobs and concentration of manufacturing jobs. Because the data is not available, construction and tourism jobs are not included in the Jonesboro metro grade.

A key factor in understanding the report is in understanding the “grading” approach used to measure the current and leading economic indicators. For example, a grade of “C” reflects no change in economic activity. The grades “B” or “A” indicate improvement above the historical average, and “D” and “F” indicate a decline in economic activity compared to the historical average.

LIMITED DATA
Ross said the federal government shutdown resulted in not having access to all data typically used to craft The Compass Report.

“While the available data still points to general employment and spending trends, the overall picture is a little less clear than normal,” Ross noted.

Greg Kaza, an economist and executive director of the Arkansas Policy Foundation, said the report continues to show broad economic growth, but there are concerns and uncertainty about economic direction.

“What is clear is that all four Arkansas metro areas still earned ‘A’ or ‘B’ grades in the data-limited report,” Kaza said. “Economic growth ranged from resilient in Northwest and solid in Central Arkansas to stable in Fort Smith and modest in Jonesboro. Consumer spending increased in all areas, with hospitality a positive marker. What is unclear is whether these above-average grades are sustainable, given Arkansas’ rising unemployment rate, and concerns about persistent inflation and its potential impact on consumer spending.”

TOP TAKEAWAYS
Following are some of the key takeaways from Ross included in The Compass Report.

Central Arkansas
Central Arkansas recorded strong economic performance in the third quarter of 2025, driven by notable growth in non-farm employment. The region added approximately 5,300 jobs over the year, with total employment increasing from 397,800 in September 2024 to 403,100 in September 2025. On balance, the metro experienced broad-based employment growth and rising consumer activity, alongside a decline in construction employment.

Northwest Arkansas
Northwest Arkansas demonstrated continued economic strength in the third quarter of 2025, marked by steady employment growth and increased activity across the manufacturing, hospitality, and construction sectors. In aggregate, Northwest Arkansas recorded solid job growth, driven by strength across key industry sectors.

Fort Smith metro
The Fort Smith Metro experienced modest economic growth in the third quarter of 2025, supported by steady gains in non-farm employment. From September 2024 to September 2025, the region added approximately 800 jobs, bringing total employment to 104,600. Taken as a whole, the regional economy remained stable, with job growth concentrated in select sectors.

Jonesboro metro
The Jonesboro Metro economy experienced slight growth during the third quarter of 2025, marked by modest gains in employment and increased sales and use tax collections. Taken together, the Jonesboro metro recorded modest employment growth alongside gradual gains in consumer spending.

DATA AND MORE ANALYSIS
Link here for the third quarter 2025 raw data gathered by the University of Arkansas at Fort Smith Center for Economic Development.

Link here for the quarterly narrative. Also, link here for the previous reports.