Good news – even if it is short-lived
By Katherine Miller
CROWLEY – For the past two years, Southwest Louisiana, especially Acadiana, have seen much growth in the areas of personal income. However, this growth is largely a consequence of the two major hurricanes just three years ago, and the trend has slowed down tremendously in the past year. Many, however, are worried that this trend may take a downward spiral.
Last year, personal income for the state of Louisiana grew at a rate of 10.5 percent, according to research done by the Federal Bureau of Economics Analysis, which was down from the previous year’s increase of 20.6. Many economists, however, warn that reading too much into the growth numbers for the past few years would be misleading and a big mistake, and that to argue that we’re the fastest growing state is not a good headline.
Kayla Link, president of the Crowley Chamber of Commerce, said the labor market in Acadiana, as well as the rest of south Louisiana, has certainly changed post-Katrina. While the rest of the country is experiencing a downturn, Acadiana and Louisiana are reaping the benefits of new and growing businesses. In my opinion, the businesses that have located or expanded in the region will help sustain the economy.
Louisiana, after posting quarterly personal income growth rates of three percent and 5.6 percent in the first half of 2007, Louisiana fell to .9 percent personal income growth rates in the third and fourth quarters, which was lower than the national growth rate of 1.3 percent and 1 percent in last year’s final two quarters. However, growth rates for quarters are naturally smaller than annual growth because they measure shorter periods of time.
During the past two years, the Chamber reported that a 5.8 percent increase, or a difference of in median household income has occurred. In 2005, the average median income was $35,822; in 2006, it was $37,292; and for 2007, the average was $37,911.
Louisiana’s two breakout growth sectors for the past three years, in the areas of mining and construction, produced a forty percent growth, with transportation and warehousing showing a twenty percent increase, and finally producing a twenty-five percent increase was durable goods manufacturing.
In the Acadiana region, Link explained that we have experienced the most growth in manufacturing, construction, healthcare, and gas related industries.
Most of Louisiana’s growth rates, however, was earned through Road Homes awards for hurricane damages done by the hurricanes, according to the federal bureau, with those awards averaging $1,250 per person. As a result nationally, Louisiana moved from the 40th spot to the 31st. According to the recent study, if it weren’t for the Road Home awards of 2007, the state would be ranked number 39. Link agrees with this statement, and also stated that Acadiana is reaping many benefits from the new programs and awards, such as having better access to free training programs and a wealth of job opportunities that weren’t here before.
“I believe this growth can be credited in part to the Gulf Opportunity Zone incentives. In addition to the opportunities created by these rebuilding efforts, businesses have had good reason to invest in our area post-hurricane due to these state and federal tax incentives.
Accuracy in producing these statements is of utmost importance because about sixty percent of Louisiana government revenue comes from sales and income taxes, and that personal income growth numbers are used to evaluate the direction of the state budget, and they confirm projections from the recent past.
While there are still quite different opinions on the subject of these recently displayed reports, Louisiana, and more importantly, Acadiana are reaping benefits. It is also very encouraging to know that we are rising above, in hopes that these circumstances will push us further and further ahead in years to come.