The U.S. economy reported its worst quarterly decline in modern history during the COVID-19 pandemic, with gross domestic product shrinking at an annual rate of 31.4% in the second quarter. The economy bounced back in the third quarter, but efforts to contain the virus’s spread throughout 2020 still resulted in a 3.5% annual economic contraction in the United States.
Arriving on the heels of a historic period of growth, COVID-19 brought about a decline in gross domestic product in every state in the country. However, no two state economies are alike, and partially as a result, some states were hit far harder than others.
Arkansas’ annual GDP stands at $114.4 billion — 2.6% lower than it was in 2019. As was the case in many states, arts, entertainment, recreation, accommodation, and food services was the fastest shrinking industry in Arkansas in 2020. Over the course of the year, as nonessential travel effectively ground to a halt in much of the country, the sector contracted by 17.7%. However, no industry had a greater negative impact on Arkansas’ economy than manufacturing, which accounted for a 0.6 percentage point contraction in the state’s total GDP.
Economic decline in Arkansas resulted in relatively minimal job losses. Overall employment in the state fell by 3.0% in 2020, compared to 5.8% nationwide.
States are ranked based on the percentage change in real GDP from 2019 to 2020. Data on GDP and industry-specific real GDP came from the BEA. Data on average annual employment and the seasonally adjusted monthly unemployment rate each came from the Bureau of Labor Statistics.
|Rank||State||Change in GDP, 2020 (%)||April 2021 unemployment (%)||Change in nonfarm employment, 2020 (%)|