New Report Outlines Louisiana’s Economic Issues
The Federal Reserve Bank in Philadelphia has released figures concerning economic growth and decline for the final quarter of 2015. It should come as no surprise that Louisiana's economy as a whole is struggling. However, there are communities in our state that are actually seeing growth.
Dr. Loren Scott, an economist with LSU, told the Louisiana Radio Network that low prices in oil patch are certainly having an effect on the state's economy as a whole. According to that Federal Reserve report Louisiana was just one of seven states that did not see an upturn in the economy at the end of 2015. According to Dr. Scott that can be tied directly to the decisions of the major oil companies in our state.
All of the major oil companies are cutting back on their capital budgets by a lot. Many of them are exiting the Gulf of Mexico and going into the shale plays in West Texas.
The two communities most affected by these changes in the oilfield are Houma and Lafayette. What's interesting is that one hour either side of Lafayette things appear to be growing.
Mater of fact, of the nine metropolitan areas that we have in the state, only two are growing right now and that's Baton Rouge and Lake Charles.
What does Dr. Scott see for the remainder of 2016? He suggested in his remarks that there could be job growth in the state by the latter part of the year. A lot of that job growth will depend on Saudi Arabia and the decisions they make regarding oil production.
They could change this in a heartbeat by simply turning the faucet off and not plugging so much oil in the market.
In other words a simple case of supply and demand. The less the supply the greater the demand. The higher the demand, the higher the price. When the prices get back to a profitable margin then more and more Louisiana residents will be able to get back to their jobs in the oil and gas industry.