Most of Louisiana’s major metropolitan areas failed to meet their employment forecasts for the first quarter of 2021, but a new economic forecast shows reason to be optimistic about future growth.
The University of Louisiana at BI Moody III College of Business in Lafayette released its economic forecast for the second quarter of 2021 on Friday, which showed job growth slowed in Louisiana in the first three months of the year.
Even with the slowdown in job growth, the report’s author, economics professor Gary Wagner, noted that future projections have improved.
“While job growth in Louisiana was slower in the first quarter of 2021 than expected, the very favorable outlook for the national economy is expected to lead to faster growth in the state over the next four quarters,” wrote Wagner. âCompared to a baseline projection of 46,000 jobs over the next year in the previous report, this updated report projects the state will gain nearly 71,000 jobs in the coming year. “
Even with improving job growth, it will still take more than a year for most metropolitan areas in the state to fully return to pre-pandemic employment levels in Wagner’s latest forecast. .
The state created less than 8,000 jobs in the first quarter, for a growth rate of around 0.4% – the lowest rate since COVID-19 job losses in the second quarter of 2020. In March, the state had regained about 45% of the jobs lost due to COVID-19, compared to about 70% nationally.
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Wagner’s forecast estimates that the state will not recoup all of the pandemic job losses until 2023.
For individual metropolitan areas, most did not meet their expected job growth for the first quarter of 2021. Alexandria was expected to create 200 jobs in the first quarter for 0.3%, but instead lost 200 jobs for a year. loss of 0.3%. Baton Rouge was expected to create 1,900 jobs for a growth rate of 0.5%, but it gained only 300 for growth of less than one percent.
Hammond was not expected to create any new jobs in the first quarter, but he added 300 jobs for 0.7% growth. Houma was supposed to create 700 new jobs for a growth of 0.8%, but he added 300 jobs for a growth of 0.4%.
Lafayette was supposed to create 800 jobs for 0.4% growth, although he really added 900 for 0.5%. Lake Charles was expected to lose 4,000 jobs in the first quarter for a loss of 4.2%, but it actually added 2,600 jobs for growth of 2.9%.
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Monroe was set to lose 500 jobs for a 0.6% loss, but he lost 600 jobs for a 0.6% loss. New Orleans was expected to create 9,500 jobs for 1.8% growth, but it actually added 1,000 jobs for 0.2% growth. Shreveport was expected to create 700 jobs for 0.4% growth, although it actually lost 1,000 jobs for a 0.6% loss.
In addition to jobs, Wagner’s forecast looks at unemployment rates, gross domestic product, and house prices, among other metrics.
Louisiana’s unemployment rate continued to decline in the first quarter of 2021, although it declined at a slower pace than in previous quarters. The unemployment rate fell from 7.9% at the end of 2020 to 7.5% in the first quarter of 2021. Over the next year, the unemployment rate is expected to fall to 6.5%.
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Louisiana’s GDP growth was around 3% at the end of 2020, and it is expected to continue growing between 1.2% and 4.9% over the next few quarters.
Statewide, home prices continue to rise. Year-on-year prices rose about 4% in the fourth quarter of 2020 and inventory levels remain below normal. A favorable credit environment made it possible to offset the rise in prices, leading to high sales levels in many markets.