Louisiana Economy Suffers One of Worst Declines in the Nation
Due to the damage caused by COVID-19 and government shutdowns, it’s been clear that no state was going to experience any economic growth through the first half of the year. Instead, the major question has revolved around which states’ economies would be hit the hardest. Well the first quarter results are in, and the numbers show Louisiana ranked near the bottom of the nation.
The Bureau of Economic Analysis’ (BEA) latest Gross Domestic Product (GDP) numbers shows Louisiana experienced a 6.6 percent decline over the first quarter of the year. This decrease made Louisiana’s GDP the lowest in the South and No. 46 in the nation. Many of the states in Louisiana’s range either had heavily tourism-based economies, like Hawaii or Nevada, or they suffered some of the worst effects from COVID-19, such as New York.
A closer look at the Louisiana data shows many of the same sectors struggling as with other economic reports. Nondurable goods manufacturing saw a precipitous decline, accounting for 1.8 percent of the 6.6 percent total decline in GDP. Accommodation and food services, which are strongly tied to the tourism industry, saw a decline of .95 percent. Meanwhile, healthcare and social assistance decreased by .76 percent, which was mostly due to the stoppage of all “elective” procedures. These three industries alone accounted for more than half of Louisiana’s drop in GDP.
Although some of this economic pain was unpreventable, it’s clear Louisiana was not well prepared to weather this storm. Through all of 2019, the state’s economy only grew 1.3 percent, ranking No. 40 in the nation and lowest in the South outside of Kentucky. The first quarter of this year nearly wiped out what little gains were made last year.
These latest numbers should make what needs to be done loud and clear for Louisiana’s leaders. The Pelican State needs a needs a strong and diverse economy, one that not only provides jobs and opportunity for citizens in good times, but also one that can ride out the bad times. Unfortunately, Louisiana currently has little previous economic growth to fall back on, and the second quarter GDP report will almost certainly be worse.
While the state legislature did enact some important reforms during this year’s two legislative sessions, there’s still much to be done to Get Louisiana Working. We’ll need them more urgently than ever, if we want to stop our economy from falling to the bottom of the nation.