Louisiana’s GDP falls fifth-most in the nation amid first wave of COVID-19 restrictions


FILE – In this Thursday, Aug. 31, 2017, file photo, a flame burns at the Shell Deer Park oil refinery in Deer Park, Texas. With the viral outbreak spreading to more countries, the price of oil has dropped precipitously as global demand weakens even further. That has sent shares tumbling for oil giants like Exxon and Chevron while smaller producers with idling rigs continue to slash jobs. (AP Photo/Gregory Bull, File)

BATON ROUGE, La. (The Livingston Parish News) – Louisiana’s gross domestic product declined 6.6 percent during the first quarter of the year, fifth most of any state, according to a U.S. Bureau of Economic Analysis estimate.

Nationally, GDP was down an estimated 5 percent. Every state and the District of Columbia saw its GDP decrease during the first three months of the year, the BEA says.

The first quarter results include only about two weeks of business restrictions imposed to control the spread of COVID-19, meaning a more severe decline likely will be reflected in the second-quarter statistics.

In Louisiana, Gov. John Bel Edwards first declared a public health emergency March 11. The first ban on large gatherings was established March 13, and the first order closing bars, restaurants and casinos was issued March 16. All businesses now are able to open, though capacity restrictions still apply.

New York saw the biggest decline among states at 8.2 percent, followed by Nevada, Hawaii and Michigan. Nebraska saw the smallest decline of 1.3 percent, according to BEA estimates.

Among industries, accommodation and food services decreased 26.8 percent, more than any other sector. Agriculture, forestry, fishing, and hunting increased 15.5 percent nationally, moderating declines in some states including Nebraska.

Before the pandemic began, Moody’s Analytics found Louisiana was perhaps the most vulnerable in the nation to even a moderate recession. Louisiana would face a shortfall equaling 11.9 percent of its total 2019 revenues, the worst outcome among the 50 states, according to Moody’s.

A University of Louisiana at Lafayette study released in May projected a second-quarter GDP decline in Louisiana of 20.4 percent, compared to 32.2 percent nationwide. But Louisiana’s economy was expected to rebound more slowly than the rest of the nation, remaining below pre-COVID-19 levels until 2022.

A more pessimistic scenario, which includes a second wave of “shut downs” and sustained oil prices below $35 a barrel, indicates Louisiana’s GDP shrinking to “Great Recession” levels of 2008 and 2009, the UL-Lafayette report shows. Tax collections could fall between $800 million and more than $1 billion over the next four quarters compared to pre-pandemic levels.

By David Jacobs | The Center Square

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