Arkansas GDP rate up 0.6%; Oklahoma sees 6.6% GDP gain

Arkansas’ 2009 GDP increased 0.6% compared to 2008, and the state was one of only 16 states to see a gain despite declines in manufacturing.

With a value of $93.015 billion, Arkansas’ year-over-year GDP growth was ranked 8th in the U.S. Arkansas’ GDP gain between 2007 and 2008 was 1%.

“It’s a remarkable report. I was expecting 2009 to see a slight decline,” said Michael Pakko, chief economist and state economic forecaster with the Institute for Economic Advancement at the University of Arkansas at Little Rock.

Neighboring Oklahoma saw its GDP rise by 6.6%, making it first in the nation. The report cited mining as a major reason for Oklahoma’s gain. Oklahoma’

Nevada suffered the largest decline, with a 6.4% drop credited primarily to declines in “accommodation and food services” and real estate.

“Durable–goods manufacturing and construction led the decline in real U.S. GDP by state in 2009. One of these two industries was the leading contributor to the decline in 34 states. The states hardest hit by the decline in durable-goods manufacturing were Michigan, Indiana, Ohio, Wisconsin, Tennessee, and Kentucky,” noted the GDP report statement from the U.S. Bureau of Economic Analysis.

According to the BEA, GDP is calculated as the “sum of what consumers, businesses, and government spend on final goods and services, plus investment and net foreign trade.”

Arkansas’ key sectors posted the following GDP results in 2009 compared to 2008.
• Agriculture, forestry, fishing & hunting: down 0.01%
• Mining: up 0.37%
• Utilities: up 0.06%
• Construction: down 0.03%
• Durable-goods manufacturing: down 0.86%
• Nondurable-goods manufacturing: down 0.39%
• Retail trade: down 0.12%
• Transportation & warehousing: down 0.23%
• Information: up 0.69%
• Finance & insurance: up 0.17%

The per capita GDP in Arkansas was $32,191, which is 74% of the U.S. average, but high enough to allow the state to move from 48th to 47th in the U.S.

Delaware’s per capita GDP of $62,080 was the highest in the nation, 48% above the national average. Mississippi’s per capita GDP of $29,634 was the lowest in the nation, 29% below the national average.

Pakko said the state’s banking sector and natural gas exploration and production activity in the Fayetteville Shale Play helped boost the state’s economy in 2009. Specifically, Pakko said the banking industry has remained on “fairly solid foundations during the whole financial crisis” because they did not engage in a lot of subprime lending and the state did not suffer from an overheated housing market.

Pakko said the 0.23% decline in the transportation sector reflects the downturn in the national trucking sector. And with Arkansas home to several large trucking operations — to include Lowell-based J.B. Hunt Transport Services and Fort Smith-based ABF Freight System — the decline is not insignificant.

“Even a small decline in that area gives it more impact when it comes to the effect on overall growth,” Pakko explained.

Pakko was willing to predict an Arkansas 2% GDP gain in 2010 and a 3% GDP gain in 2011 “as we move further away” from the recession.