Business leaders from one end of the spectrum to the other are praising 2025 as a banner year for Arkansas business, and many are also looking ahead to an equally prosperous 2026.
“I’d give [Arkansas] business and industry probably an A-minus and the state’s overall economy probably a B-plus only because of weak spots in agriculture,” said Randy Zook, president and CEO of the Arkansas State Chamber of Commerce/Associated Industries of Arkansas. “Everything else is hitting.”
Randy Zook
Zook’s enthusiasm was articulated by a flurry of announcements last year as businesses both native to Arkansas and imported from across the country and around the world sought to establish or expand presence in the Natural State.
Statistics provided by the Arkansas Economic Development Commission show the list of building project announcements, 24 in all, surpass about $6 billion in investment and is expected to create more than 3,000 new jobs, as well as preserve hundreds more, as companies choose to stay in the state.
Two of the announced projects eclipsed the $1 billion mark, including the Green Bay Packaging project in Morrilton ($1 billion) and the Google data center in West Memphis ($4 billion).
As if that were not enough to celebrate, 10 additional projects either broke ground or held their grand openings last year. Those projects totaled roughly $2 billion in investment and are expected to create at least 1,000 new jobs.
Zook said two factors have contributed to Arkansas suddenly being a hot address for companies large and small, foreign and domestic.
“No. 1 is we’ve been discovered as a great crossroads for distribution and transportation of all kinds — rail, highway, river transportation. We’re the beneficiary of that as a starting point,” he said. “Secondly, you’ve got great policy that has been put in place across the last 15 to 17 years or so. We’re much more competitive with our income tax structure for individuals, as well as corporations. We’re a low-cost place to operate a business or to raise a family.
“You’ve got all those factors, and you couple that with the stupid things going on in other parts of the country that are moving people out from the West Coast and the East Coast. They’re just determined to undermine themselves, and we’re benefiting from some of that.”
The investment has had a domino effect that cuts across company size and type of industry, further underscoring the state’s strength in fundamental business measurements. It is not just an empty marketing pitch, Zook is quick to note, but a growing consensus opinion within the wider business community nationally.
“David Burritt, CEO of U.S. Steel, one of the world’s largest steel producers, says the place to be for the steel business is Arkansas now that Mississippi County is the No. 1 steel-producing county in the U.S. That is a remarkable statement and a statement of fact,” Zook said. “Now we’ve got some of these data centers looking at us and poking around, and we’ll probably land a couple or three of them.
“We’ve still got gas resources sitting up there, waiting on a reasonable price for gas to resume. You’ve got the lithium industry that could really be something in south Arkansas as the demand improves and pricing improves. They’re just waiting on the right number. Add all that up on top of a world-class agricultural sector and a world-class forest product sector and the fact that Arkansas is rich in resources.”
Clint O’Neal, AEDC executive director, also credited lawmakers for the number of new projects and for having bought into a vision that is now coming to fruition all over Arkansas.
Clint O’Neal
“As far as major wins in 2025, I’ll start with the 2025 legislative session. I would say it’s been the most successful legislative session in 20, 25 years,” he said. “It was really a priority of ours prior to the session to put together an incentives working group. We had economic development professionals and community leaders from around the state meeting several times, thinking through our economic development toolbox. Are we competitive as a state? Do we need to benchmark and study other states? Are there incentive programs or financial assistance programs that we could recommend to the legislature?
“We put together what we call IMPACT, Improving Markets, Promoting Arkansas Commerce and Trade, which is basically an umbrella for several incentive programs, and it was very successful. For example, we passed data center legislation here in Arkansas in 2023 that was amended in a very favorable way in 2025. We have a lithium incentive where we wanted to make a strong statement to those considering large lithium extraction and processing projects.”
O’Neal said the discussions also took into account the needs of businesses already operating in Arkansas and looked at how to provide financial perks that allow them to grow and prosper in place.
“As a group, we said we have great incentives, but we need more. We need to do more for existing Arkansas companies that have been loyal to the state,” he said. “Maybe they have a multistate footprint and they’re thinking of making a major expansion. How do we incentivize those companies to make those investments here rather than somewhere else?”
In addition to the usual retinue of tax breaks and incentives, AEDC looked at other practical elements for upping the state’s desirability for business and industry. Such improvements were not always complicated to see, such as providing more shovel-ready building sites, but all took coordinated effort at the local, county and state levels to pull off.
“We noticed that we’re behind other states when it comes to site development,” O’Neal said. “There are fairly sizable industrial projects that come along where the properties owned by the city or by the economic development organization are covered in trees or need infrastructure improvements. There are other states that have invested a whole lot of money to strengthen industrial sites to prepare the way for development.
“We got our start in site development in 2023, at the beginning of the Sanders administration. The governor’s office was in favor of this, and we had $10 million in that first year as kind of a pilot program. In the ‘25 session, the legislature passed $50 million, $25 million per year for the next two fiscal years, and this has really accelerated the process around the state.”
Economic success has also been seen in the interrelated areas of tourism and hospitality in Arkansas. That is reflected both in number of visitors and funds generated via various surcharges related to certain tourism-related items such as marine craft rentals and short-term lodging up to and including Airbnb and Vrbo properties. Those surcharges, referred to as the 2 percent tourism tax, totaled $26.2 million for fiscal year 2025, a hair off the $26.3 million record set in FY 2024.
As for visitors, Arkansas Tourism Division Director Dalaney Thomas said 52 million people had some type of travel experience in Arkansas in calendar year 2024, including both native-originating and out-of-state guests traveling for business or leisure. That was a 4 percent increase over 2023 and resulted in tourism spending of $10.3 billion. While calendar year 2025 numbers had yet to be finalized at press time, she said numbers were tracking similarly. For that, she pointed to several factors.
Dalaney Thomas
“There’s a couple of things that I think play a part in that,” she said. “One, nothing really positive came out of COVID-19 except for outdoor recreation becoming something people sought out, and that really put Arkansas on not only a national stage but a global stage in terms of what we offer. I think we’ve continued to see some of that momentum based on the outdoor rec product.
“Then we have continued to see — and this has been a strategic push of ours — how Arkansas has become a year-round destination. I’ve had the great pleasure of working alongside the state office for about 10 years, and we used to really focus on the spring, summer and the fall. That was the sweet spot from an advertising perspective. As we’ve been able to grow our advertising impact, we’re now talking about Arkansas year-round and how, typically speaking, November and December can be milder, especially when compared to other states where we want to be competitive. I think that year-round piece is playing a really integral role in our success, as well.”
One way travel and tourism has benefited from the state’s business growth overall is in how people who visit the state on work trips are very often so impressed they return for vacationing.
“Business travel is a significant part of Arkansas’ success in the tourism space with the many corporate companies that are based here,” Thomas said. “A lot of our local destination offices are actively bidding on events and conferences and conventions to bring people to the state, and that’s one way to introduce people to Arkansas who otherwise may not have chosen to travel here on their own.
“We’ve been working alongside cities and other organizations as partners to attract those events and conferences. We saw a couple of great successes last year with other state agencies that have hosted events, including national events.”
With the increased influx of visitors comes the need for more attractions and infrastructure, something Thomas said the department is helping to develop in partnership with other divisions of the Arkansas Department of Parks, Heritage and Tourism.
“We’ve seen some gaps, and there are some important developments that are happening to address them,” she said. “Certainly, cycling in this state has been a push, but one thing that has always been lacking in the cycling scene in Arkansas has been enough elevation for a mountain biker to have a big drop or a really significant elevation change. That’s been identified, and we have some really major projects on the horizon in Bella Vista to address that.”
One project, a trails bike park currently under construction, will create spaces for people to develop their skills on up to a lift-served access for the most advanced riders.
“A lift, kind of like a ski lift, will carry you up with your bike, and you’re able to ride down and really have that elevation change that a more experienced cyclist would want,” Thomas said. “At Queen Wilhelmina State Park, another cycling park is beginning to be developed, and when it’s completed, which we’re a few years out from that, it will be the world’s largest lift-served trail built specifically for mountain biking.”
The state’s hospitality industry is also looking to capitalize on the additional visitors and new and expanded corporate citizen population. Alicia Payseno, who recently took over as chief operating officer at the Arkansas Hospitality Association, said collaboration is the watchword for 2026. She said in her previous roles as director of economic development for the city of Cabot and head of the Maumelle Area Chamber of Commerce, she has seen the impact such partnerships can have on helping smaller communities develop a whole host of amenities.
Alicia Payseno
“In Cabot, one of the main focuses that our administration had was in the recruitment of retail, restaurants, recreation and lodging,” she said. “I’ve spent the past five years working with national brands to recruit them not just to the city of Cabot but to Arkansas. I worked with a lot of regional organizations where we were going after the Marriotts, the Hiltons and even larger brands.
“I understand the challenges that you have as a city trying to plan a restaurant or a hotel, but I’ve also seen the benefits and the tax impact that it gives back to that area. One of the major things that we’re going to be working on [via the Hospitality Association] is establishing a unified and thriving hospitality network so that as these hurdles present themselves, we are able to leverage not just a small region of the state but actually be able to leverage the entire state collaboratively.”
Payseno said she looks forward to the chance to work with state lawmakers in support of bills that would make more money available statewide for incentivizing development in the restaurant, lodging and tourism space.
“Other surrounding states, like Oklahoma, Louisiana and Texas, offer substantial incentives for the recruitment of those industries,” she said. “Currently, we don’t have that tool in our toolbox.”
She is also eager to dig into the issues that impact the state regionally to better craft targeted solutions for addressing development and promotion challenges within the hospitality industry.
“We are going to take a very collaborative approach to every initiative that comes through the legislature not just for central Arkansas but in northwest Arkansas, northeast Arkansas, the Delta,” she said. “What might be a big challenge in one part of the state may not even be understood in another. I want to make sure that we’re communicating, listening and advocating for all of our members across the state.”
TOP RIGHT FEATURE PHOTO by CBMO Creative
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