The Arkansas economy expanded in 2007 despite mixed signals and abundant evidence of declining growth going into 2008. The main source of weakness stemmed from ongoing struggles in the large manufacturing base in the state. While manufacturing represented a larger share of total employment as compared to the national share, it experienced the first cyclical period from the last recession without rebound or employment contribution to the state in modern economic times. Although output is up and several sectors are doing well, the overall manufacturing base has been impaired. In summary, the Arkansas economy has already been staggered by a variety of long-term and cyclical problems in manufacturing. The potential for sidestepping any national recession with local factors of growth appears more unlikely than was the case in other recent business cycles. Some mitigating factors include the relative lack of overbuilt housing markets and the lack of financial sector layoffs in the state. An energy play also helps in the absence of other sector growth.
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"The Arkansas Economic Outlook for 2008"Please download to view full document