2009 Business Outlook Summit
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2009 Business Outlook Summit The Louisiana (and Northeast Louisiana) Economy PowerPoint PPT Presentation


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2009 Business Outlook Summit The Louisiana (and Northeast Louisiana) Economy Prepared and presented by : John Francis, PHD Assistant Professor of Economics (Louisiana Tech University) Robert Eisenstadt, PhD Associate Professor of Economics (University of LA – Monroe).

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2009 Business Outlook Summit The Louisiana (and Northeast Louisiana) Economy

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2009 business outlook summit the louisiana and northeast louisiana economy

2009 Business Outlook Summit

The Louisiana

(and Northeast Louisiana)

Economy

Prepared and presented by:

John Francis, PHD

Assistant Professor of Economics (Louisiana Tech University)

Robert Eisenstadt, PhD

Associate Professor of Economics (University of LA – Monroe)


2009 business outlook summit the louisiana and northeast louisiana economy

The following presentation will be available

for review on-line at:

cba.ulm.edu/cber


2009 business outlook summit the louisiana and northeast louisiana economy

Louisiana Gross State Product ($millions): The illusion of our insularity.


2009 business outlook summit the louisiana and northeast louisiana economy

The importance of oil in Louisiana’s growth.

GDP Growth and Oil Prices (index)


2009 business outlook summit the louisiana and northeast louisiana economy

Employment by the Numbers


2009 business outlook summit the louisiana and northeast louisiana economy

Louisiana employment growth has been relatively strong.

Employment data from LA Dept. Of Labor; and U.S. Bureau of Economic Analysis.


2009 business outlook summit the louisiana and northeast louisiana economy

Employment growth is mostly positive across the State (qtr 2 comparison).

LA Dept. of Labor, Laworks.net


2009 business outlook summit the louisiana and northeast louisiana economy

The relative performance of Northeast Louisiana.

OLM = Ouachita, Lincoln, Morehouse Parishes


2009 business outlook summit the louisiana and northeast louisiana economy

Wage and salary disbursements: US, LA, Monroe.


2009 business outlook summit the louisiana and northeast louisiana economy

Where there is no housing bubble, there is probably no housing bust.

Top ten and bottom ten states for home price appreciation: 2000-2006.


2009 business outlook summit the louisiana and northeast louisiana economy

Louisiana home prices have remained relatively stable.

Bismarck, ND +15%

Ft. Meyers, FL -43%


2009 business outlook summit the louisiana and northeast louisiana economy

Average selling prices of existing homes adjusted for inflation.

Data from National Association of Realtors, Northeast Louisiana Realtors Association.


2009 business outlook summit the louisiana and northeast louisiana economy

Louisiana currently ranks 41st in foreclosure rate.

Foreclosures:

NV is #1 WV is #50

National data from RealtyTrac


2009 business outlook summit the louisiana and northeast louisiana economy

The market for existing homes in NE Louisiana.


2009 business outlook summit the louisiana and northeast louisiana economy

Home building in Louisiana mostly mirrors the Nation.


2009 business outlook summit the louisiana and northeast louisiana economy

New Residential Construction – Permit Value

Permit data from U.S. Census Bureau; and McGraw Hill MarketTrack


2009 business outlook summit the louisiana and northeast louisiana economy

Construction employment in LA, however, remains stable.

  • Nearly 20% annual increase in Civil Engineering projects.

  • Public projects expected in NE LA include:

    • Delta Community College

    • New Airport Terminal


2009 business outlook summit the louisiana and northeast louisiana economy

Louisiana lags the Nation in bankruptcies.

U.S. Courts: U.S. Dept. of Justice


Non business bankruptcies

Non-Business Bankruptcies


2009 business outlook summit the louisiana and northeast louisiana economy

NE LA and the Nation are on the same general retail track


2009 business outlook summit the louisiana and northeast louisiana economy

Seasonal sales were stronger locally

Nov-Dec (seasonal) retail sales:Nation = -5.6%;LA = -1.4%;Ouachita = +1.2%


2009 business outlook summit the louisiana and northeast louisiana economy

Motor vehicle sales are weak: US = -15.8%, LA sales = -15.6%

-15.6%

-12.8%

-17.0%

Data from Cross-Sell reports


2009 business outlook summit the louisiana and northeast louisiana economy

Estimated value of auto purchases by Ouachita Parish residents.


2009 business outlook summit the louisiana and northeast louisiana economy

Relative economic strength is by no means a certainty in Louisiana

From our perspective, there are two sources of concern when considering the long-term growth of Louisiana (and NE Louisiana).

  • Out-migration of population

  • Year-to-year uncertainty (volatility) of State tax revenues


2009 business outlook summit the louisiana and northeast louisiana economy

We have shipped more people out of Louisiana than we've attracted


2009 business outlook summit the louisiana and northeast louisiana economy

Population growth is weak or even non-existent


Our 8 year trend is well behind the nation

Our 8-year trend is well behind the Nation.


2009 business outlook summit the louisiana and northeast louisiana economy

Current indicated effect on State revenue of Louisiana tax policy change.

Percentage change in Louisiana Monthly Tax Revenues: January/February 2008 to 2009


2009 business outlook summit the louisiana and northeast louisiana economy

Year over Year Tax Revenues (to date) by the Numbers


2009 business outlook summit the louisiana and northeast louisiana economy

Tax burden (ranking) of Louisiana and surrounding states.


2009 business outlook summit the louisiana and northeast louisiana economy

LA policy changes and the (approximate) annual effect on State tax revenue.

Return marginal tax brackets to pre-Stelly levels:-$300,000,000

Reinstate the deductibility of excess Federal Itemized:-$250,000,000

Subtotal-$550,000,000

Oil prices budgeted at $84/bbl.

Current actual price = $50/bbl

Shortfall in severance taxes -$410,000,000

Total estimated shortfall-$960,000,000

Add to this amount the effect of a declining tax base (recession) and you have the proverbial “billion here, billion there…”


2009 business outlook summit the louisiana and northeast louisiana economy

  • Next up:

  • Determinants of State Tax Revenue Variability.

  • Labor Out-migration by Education and Skill Level.


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