Latest Issue of Regional Economic Analysis of Louisiana (REAL) Report Published
The Center for Economic Research, housed in Louisiana Tech University’s College of Business, recently published the fourth installment of the Regional Economic Analysis of Louisiana (REAL) Report.
A cohesive body of research examining multiple aspects of Louisiana standards of living, this issue builds on the Spring 2020 report exploring the economic impact of the global COVID-19 pandemic, with specific focuses on economic forecasts for the state and employment and labor income growth and losses. The report also explores the impact of the rebuilding of three of Louisiana Tech’s athletics complexes, with positive outcomes predicted.
Team members contributing to this issue include Assistant Professor of Economics Dr. Patrick Scott, who serves as Center director, junior finance major Joshua Whitlow, and junior economics major Marc Enoch Hebane Guehi.
As noted in the report, the regional economy will greatly benefit from the current construction efforts underway at Louisiana Tech. Following the April 2019 tornado, the University began to rebuild the J.C. Love Field at Pat Patterson Park and Lady Techsters Softball and Soccer Complexes—a combined estimated cost of $42 million.
“This type of economic event naturally creates positive ripple effects throughout the community and the state at large,” said Dr. Scott. “We estimate that the regional economy will produce $2.64 for every dollar spent in these construction endeavors.”
These facilities are expected to support an additional 236 jobs in the total state economy with a combined labor income of approximately $11.6 million. Estimates in the report predict nearly 60 percent of the economic benefit remaining in North Louisiana parishes, with a market value of indirect and induced effects totaling around $68 million.
The report also highlighted the economic impact of the pandemic on Louisiana, and according to Dr. Scott, the economic indicator forecasts reflect a state economy in crisis.
“While the bleeding has stopped in the labor market, the healing is far from happening,” said Dr. Scott. “The health crisis is driving the slow recovery. Addressing it is the only way to get things open and running at full capacity again, but that is not expected until well into 2021 or 2022 for Louisiana.”
Whitlow’s research looked specifically at how Louisiana’s tourism industry has been affected by the pandemic.
“I focused on three particular aspects: output, employment, and labor income,” said Whitlow. “While all three of these areas decreased, there was a disproportionate loss in regard to employment and labor income.”
According to his summary, the state’s tourism industries have lost in excess of $25.5 billion in total value and $7.9 billion in labor income since this COVID crisis started. These overall losses represent 44 percent of output of the industry and 43 percent of labor income. Prior to the pandemic, the tourism industry—including food services, hotels, recreations, gambling, and independent artists/performers—comprised more than $68 billion in economic activity for the state.
Junior economics major Marc Enoch Hebane Guehi explored industries that are on the ascendancy and descendancy based on both employment changes and labor income changes. Manufacturing- and tourism-related industries took the brunt of the employment losses, and, according to Guehi’s research, there is no certainty that these jobs will come back post-pandemic. His findings also show the eight industries that experienced the worst employment losses also experienced the worst labor income losses in the state, implying that for many of the industries that are shedding jobs, it is the least paid workers (typically those who cannot work from home) being laid off. On a positive note, several industries are employing more people relative to pre-pandemic levels, particularly high-skilled manufacturing.
The REAL Report is a quarterly publication designed to provide insight into recent economic developments in Louisiana. It is produced by the Center for Economic Research, in collaboration with faculty and students in Louisiana Tech University’s College of Business, for the state of Louisiana and our region of the South.