Louisiana has been struggling to restore its economy for some time now, but state officials are now feeling hopeful that the worst is behind them. Financial indicators already reveal an improvement across the board with trends seeming to promise that this is just the start of an upswing that could positively impact people in every sector. Analyzing adjusted figures for the month of June, which were provided by the U.S. Bureau of Labor Statistics, officials share the good news that non-farming industries throughout the state are rebounding.
A report released by the Louisiana Workforce Commission shares that job growth has been a key indicator that the state economy is rebounding. Excluding the farming sector, the state has added 20,700 since June 2016 with 4,400 of those jobs having been made available since May of this year. There has been a jump of 22,300 jobs in the private sector as well.
Obviously, job growth has a direct affect on the unemployment rate, but it is worth noting that the state’s overall unemployment rate of 5.5% is the lowest it has been in three years.
Where are the jobs now? Many of the newly created jobs were in the field of construction with that industry introducing a total of 15,600 jobs throughout the past year.
The news isn’t all good. Lower oil prices have negatively impacted the Louisiana workforce for a few years now. As a result, the oil and gas industry has been hit the hardest with a loss of 2,100 jobs this year. While that is a significant drop, the last thirty days have shown a rebound even in that industry with the addition of 800 jobs.
Governor John Bel Edwards and Ava Dejoie, who serves as the executive director of the Louisiana Workforce Commission are in agreement that it’s time to see a shift in the direction of professions that make up the state’s workforce.
As more and more businesses seek digital optimization and automation, the state officials call for an increased pool of skilled professionals. Governor Edwards recognizes that the people of Louisiana are among the hardest working people in the country, but he suggests the fall of the oil and gas industry is forcing everyone to refocus and exploit new opportunities.
If those 800 news jobs are any indication, the answer to that question is an unqualified yes, but some worry that it may just be a temporary spike. While the tourism trade does boost the overall state economy, Louisiana has always relied heavily on the oil and gas industry to fuel job growth in every sector, so it’s understandable that the downturn of that industry had a disastrous affect on the state’s entire financial infrastructure.
As the economy begins to rebound, the oil and gas industry naturally follows suit, but at a substantially slower rate. Some still see this as good news. While it may take awhile, a few years at least, the productivity of the oil and gas industry will return to its former glory, but, in the interim, state officials, businesses, and working residents look to other sectors for more substantial and more immediate growth.
While recent job growth has certainly been a boost to economic optimism, many in Louisiana are hoping to see even more growth. State officials are urging Governor Edwards to instill new programs to keep the unemployment rate low and to further stimulate job growth.
In response, Edwards has been promoting a new tax relief program designed to bring businesses to the state. The mandate, which went into effect last year, gives municipalities a say in how tax exemptions are granted. Primarily, this forces businesses to prove a history of job creation within their organizations in order to qualify for the tax breaks.
Many businesses object to the establishment of Louisiana’s Industrial Tax Exemption Program (ITEP), because they say the restrictions actually jeopardize economic growth. While the program offers property tax breaks for manufacturers for up to 10 years in exchange for renewed investments and capitalized investments, critics of the program say ITEP fails to recognize supplemental job creation that still supports the manufacturing industry. Additionally, rising interest rates prohibit many businesses from participating in the program, because the cost of doing business far outweighs the benefits offered by ITEP.
Boh Bros. Construction President Robert Boh says a minimal increase in interest rates may not adversely affect businesses and Louisiana may still continue to see job growth and a rebounding economy. However, Boh adds that a significant increase instilled by the Federal Reserve over the next 18 months, as many in the business community fear, will dash hopes for a rejuvenated economy in Louisiana.
While Louisiana businesses fear the crunch between state regulations and a spike in interest rates, recent indicators of a rebounding state economy can’t be ignored. With fewer people out of work and greater wealth coming to many households, communities will see greater spending, which, in turn, will continue to spur the economy. As spending and job growth continues, Louisiana may find new ways to stimulate the economy without relying as heavily on the gas and oil industry.
America as a whole is moving toward a more digital based society, negating the needs of products supplied by industries upon which Louisiana has heavily relied in the past. This means the state has an opportunity to launch a new direction for its workforce and for the businesses that thrive within the state’s communities.
Governor Edwards recognizes this change and, in urging people to seek out new training programs to allow them to compete in a skilled workforce, he’s ensuring that Louisiana families will continue to prosper and thrive in the coming years. Working together to rebuild Louisiana’s economy, state officials, businesses, and the workforce can continue to ensure a rebounding and healthier economy.