The four Arkansas metro areas measured by The Compass Report continue to show economic growth in central and Northwest Arkansas, with economic activity moderating in the Fort Smith and Jonesboro metros during the second quarter of 2025.
In the second quarter of 2025 (April-June) report, Central Arkansas received an “B-” grade, the Fort Smith metro had a “C” grade, the Jonesboro area received a “C+” grade, and Northwest Arkansas had a “B-” grade.
The Compass Report is a partnership between the University of Arkansas at Fort Smith[1] (UAFS) and Talk Business & Politics. First National Bank of Fort Smith[2] is a sponsor of the statewide report.
Kendall Ross, UAFS associate vice chancellor of Economic and Workforce Development, and Kaitlyn Cavaness, an intern in the UAFS Center for Economic Development[3] who helps compile, manage and review the data, are responsible for data collection and written analysis for the report.
The report measures four leading and four current economic indicators to provide a grade for a regional economy. The eight categories measured to determine The Compass Report grade in the Central Arkansas, Fort Smith and Northwest Arkansas areas are total nonfarm jobs, unemployment rate, building permits, sales tax revenue, manufacturing jobs, service sector jobs, construction jobs, tourism jobs and concentration of manufacturing jobs. Because the data is not available, construction and tourism jobs are not included in the Jonesboro metro grade.
A key factor in understanding the report is in understanding the “grading” approach used to measure the current and leading economic indicators. For example, a grade of “C” reflects no change in economic activity. The grades “B” or “A” indicate improvement above the historical average, and “D” and “F” indicate a decline in economic activity compared to the historical average.
Greg Kaza, an economist and executive director of the Arkansas Policy Foundation[4], said the state’s economy, based on activity in the four metros as measured by The Compass Report, is still expanding.
“Payroll employment growth statewide and in all metros show the expansion continued in Arkansas in the second quarter, with economic stability, resilience and solid growth noted in local surveys,” Kaza noted.
Kaza also provided the following notes about data in The Compass Report.
• Manufacturing employment continues to grow and is at a higher level than any time since the Great Recession ended in June 2009.
• Construction employment has been a strong performer but may have peaked this cycle at the state level.
• Building permit valuations varied by metro area, with the construction private industry sector a factor.
• Inflation remains an issue, though consumer spending continued to increase to varying degrees by metro.
• Unemployment rate increases in all four Arkansas metro areas and at the state level suggest dysfunction in the labor market.
TOP TAKEAWAYS
Following are some of the key takeaways from Ross included in The Compass Report.
• Central Arkansas
Central Arkansas recorded strong economic performance in the second quarter of 2025, with notable growth in non-farm employment. The region added approximately 7,400 jobs over the year, increasing from 395,600 in June 2024 to 403,000 in June 2025 – a 1.87% gain. Job creation remained consistent, with manufacturing adding approximately 700 jobs and the hospitality sector also contributing to the overall growth.
• Northwest Arkansas
Northwest Arkansas demonstrated continued economic strength in the second quarter of 2025, marked by steady employment growth and increases in both manufacturing and construction activity. The region added approximately 500 non-farm jobs over the year, with total employment rising from 314,100 in June 2024 to 314,600 in June 2025.
• Fort Smith metro
The Fort Smith Metro reported overall flat economic growth in Q2 2025, with steady gains in non-farm employment. From June 2024 to June 2025, approximately 1,700 jobs were added, bringing the total number of jobs in the region to 104,400. Job growth was led by modest increases in the construction and hospitality sectors, while employment in manufacturing remained unchanged.
• Jonesboro metro
The Jonesboro Metro economy experienced slight growth during the second quarter of 2025, marked by modest gains in employment and an increase in unemployment. Non-farm employment rose by approximately 1,000 jobs over the year, growing from 64,600 in June 2024 to 65,600 in June 2025.
DATA AND MORE ANALYSIS
Link here[5] for the second quarter 2025 raw data gathered by the University of Arkansas at Fort Smith Center for Economic Development.
Link here[6] for the quarterly narrative. Also, link here[7] for the previous reports.
Related
References
- ^ University of Arkansas at Fort Smith (uafs.edu)
- ^ First National Bank of Fort Smith (fnbfs.com)
- ^ Center for Economic Development (uafs.edu)
- ^ Arkansas Policy Foundation (arkansaspolicyfoundation.org)
- ^ Link here (talkbusiness.net)
- ^ Link here (talkbusiness.net)
- ^ link here (talkbusiness.net)