What's Happening?
The Creighton University Mid-America Business Conditions Index, which includes Arkansas, indicates a decline in manufacturing activity and overall flat or declining economic conditions in September. The index fell to 49.8 from 50.5 in August, marking the second time in three months it was below the growth neutral mark of 50. Arkansas's Business Conditions Index increased slightly to 48.8 from 48.4 in August. The state's manufacturing sector exported $3.2 billion in goods for the first seven months of 2025, down 7.1% compared to the same period in 2024. The top export was transportation equipment. Supply managers reported weakness in imports and exports, along with higher prices for imported goods.
Why It's Important?
The decline in manufacturing activity and exports in Mid-America, including Arkansas, highlights challenges faced by the regional economy. Elevated wholesale inflation and tariffs are impacting purchasing decisions and contributing to economic uncertainty. The Federal Reserve may consider cutting interest rates at its upcoming meetings to address slowing regional and U.S. economies. The decline in exports and manufacturing activity could affect employment and economic growth in the region, with potential implications for national economic policy.
What's Next?
The Federal Reserve is expected to address inflationary pressures and economic slowdown by potentially cutting interest rates at its meetings on October 28-29. Businesses and policymakers will need to monitor economic indicators and adjust strategies to mitigate the impact of tariffs and inflation. Supply managers may continue to face challenges in managing costs and maintaining competitiveness in the global market.
