Arkansas' gross domestic product grew at an annual rate of 2.3 percent in the third quarter last year, finishing 41st among the 50 states, according to the U.S. Bureau of Economic Analysis.
Gross domestic product is the total value of goods and services produced in a state. Third quarter GDP growth in the United States was 3.5 percent.
Arkansas' performance was disappointing, Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville, said Friday.
"Any time we're growing slower than the national average, it's disappointing," Deck said. "Because we are in an economic expansion. But [2.3 percent growth] certainly isn't recessionary."
The state's economy didn't change much from the second to the third quarter, Deck said.
"The overall mix of our economic activity hasn't substantially changed much over the last couple of years," Deck said.
A 2.3 percent growth rate is not bad, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.
"It's nothing to complain about," Pakko said. "It's just that the 3.5 percent nationwide average was a pretty strong quarter."
Of the 21 business sectors, the leading contributors to Arkansas' economic growth from the second to the third quarter last year were finance and insurance, which was up 0.40 percent; wholesale trade, which was up 0.33 percent; and durable goods manufacturing, up 0.32 percent.
Arkansas' worst-performing sectors included real estate and rental and leasing, which was down 0.17 percent; nondurable goods manufacturing, down 0.16 percent; and agriculture, forestry, fishing and hunting, down 0.11 percent.
The agriculture sector is typically volatile, Pakko said.
"I don't think [a 0.11 percent decline] necessarily is a really good indicator of what the true trends are in agriculture," Pakko said.
The agriculture sector was down in Arkansas but was up 0.12 percent nationwide.
Durable goods manufacturing did well for the quarter even though employment in manufacturing continues to decline, Deck said. Durable goods -- such as automobiles, refrigerators and washing machines -- are those that last more than a year. Nondurable goods last less than a year.
"It's not that we're manufacturing less stuff, it's that we don't need as many people to produce it [as in the past]," Deck said.
Two of the six states that border Arkansas had lower third quarter GDP growth -- Louisiana was at 1.2 percent and Oklahoma at 0.7 percent. The other four states outperformed Arkansas, with GDP rising 4.3 percent in Texas, 3.8 percent in Missouri, 3.4 percent in Mississippi and 3.2 percent in Tennessee.
South Dakota had the country's highest increase in gross domestic product at 7.1 percent and New Mexico was the lowest at -0.1 percent.
Pakko also calculated the third-quarter growth in 2016 compared with the third quarter of 2015. Arkansas actually outperformed the country in that year-over-year comparison with 2.1 percent growth compared with the country's 1.6 percent growth.
Business on 02/04/2017