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
(and Northeast Louisiana)
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)
The following presentation will be available
for review on-line at:
Louisiana Gross State Product ($millions): The illusion of our insularity.
The importance of oil in Louisiana’s growth.
GDP Growth and Oil Prices (index)
Employment by the Numbers
Louisiana employment growth has been relatively strong.
Employment data from LA Dept. Of Labor; and U.S. Bureau of Economic Analysis.
Employment growth is mostly positive across the State (qtr 2 comparison).
LA Dept. of Labor, Laworks.net
The relative performance of Northeast Louisiana.
OLM = Ouachita, Lincoln, Morehouse Parishes
Wage and salary disbursements: US, LA, Monroe.
Where there is no housing bubble, there is probably no housing bust.
Top ten and bottom ten states for home price appreciation: 2000-2006.
Louisiana home prices have remained relatively stable.
Bismarck, ND +15%
Ft. Meyers, FL -43%
Average selling prices of existing homes adjusted for inflation.
Data from National Association of Realtors, Northeast Louisiana Realtors Association.
Louisiana currently ranks 41st in foreclosure rate.
NV is #1 WV is #50
National data from RealtyTrac
The market for existing homes in NE Louisiana.
Home building in Louisiana mostly mirrors the Nation.
New Residential Construction – Permit Value
Permit data from U.S. Census Bureau; and McGraw Hill MarketTrack
Construction employment in LA, however, remains stable.
Louisiana lags the Nation in bankruptcies.
U.S. Courts: U.S. Dept. of Justice
NE LA and the Nation are on the same general retail track
Seasonal sales were stronger locally
Nov-Dec (seasonal) retail sales:Nation = -5.6%;LA = -1.4%;Ouachita = +1.2%
Motor vehicle sales are weak: US = -15.8%, LA sales = -15.6%
Data from Cross-Sell reports
Estimated value of auto purchases by Ouachita Parish residents.
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).
We have shipped more people out of Louisiana than we've attracted
Population growth is weak or even non-existent
Current indicated effect on State revenue of Louisiana tax policy change.
Percentage change in Louisiana Monthly Tax Revenues: January/February 2008 to 2009
Year over Year Tax Revenues (to date) by the Numbers
Tax burden (ranking) of Louisiana and surrounding states.
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
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…”