Economic Growth Improves in 3rd Quarter, But Not Enough
Finally, Louisiana got some much needed good economic news with the latest report about economic growth from the Bureau of Economic Analysis. This report showed that in the 3rd quarter of 2019, the Louisiana economy grew at 2.9 percent, the 4th highest in the nation.
The largest reason for this boost in economic growth, measured by Gross Domestic Product (GDP), was due to economic growth in the sectors of manufacturing of non-durable goods. The oil and gas, and retail sectors also contributed to this good economic news. Continued growth in these sectors are important to the economic prosperity of Louisiana.
But, as positive as this new report is, it’s important to take its findings in context. Averaging the GDP of first 3 quarters of 2019, Louisiana only had an average economic growth of 1.5 percent, which ranks 36th in the nation. Meanwhile, the Southeast region, which encompasses all of Louisiana’s neighbors, had an economic growth of 2.1 percent. So, even with an excellent 3rd quarter report, Louisiana’s economic growth fell decisively behind all of the other states in the Southeast region.
Another factor to remember is that economic growth numbers are often subject to revisions. For example, the 2019 second quarter GDP report revised the first quarter 3.8 percent GDP down to a big, fat goose egg. While unlikely happen to again, this demonstrates the importance of looking at the larger picture rather than focusing on just one quarter.
Even if this good growth number holds up, there is still so much to be done to improve the state of Louisiana. The Pelican state will only see sustained high economic growth if the state fixes its underlying issues. That means fixing policy problems in areas of taxes, tort reform and education, among others. If these issues are addressed by the new legislature, Louisiana may continue to see excellent growth reports like this one, rather than having them be a rare, pleasant surprise.