Local economy starts ‘long road back’
New report by well-known Louisiana economist predicts slow recovery after four-year oil bust.
A new forecast from a well-known Louisiana economist presents one of the most optimistic forecasts for Houma-Thibodaux’s economy since an offshore oil bust began four years ago.
Loren Scott’s annual economic forecast, which he delivered Wednesday to members of the South Louisiana Economic Council and other local business officials, does not predict a return to boom times anytime soon. Instead, it describes the area’s oil-based economy as beginning a slow climb from the bottom of the latest downfall.
“After much bloodletting, the corner appears to have been turned,” the report says. “Fabricators and shipbuilders are making a reasonably successful shift to non-extraction-related-customers. An oil price of $80 a barrel by 2020 is expected to start a serious revival in the Gulf by 2020.”
Scott projects the metro area, comprised of Terrebonne and Lafourche parishes, will gain 700 jobs, 0.8 percent, next year. It will add another 2,100 jobs, 2.4 percent, in 2020, driven largely by gains in oil and gas.
A rebound has already begun, the report suggests, defying his prediction last year that the area would lose another 1,800 jobs in 2018. Instead, he now predicts the local economy will end the year with a net gain of 200 jobs.
“The numbers obviously do not show great growth,” the report says, “but at least they are up.”
‘LONG ROAD BACK’
Houma has a “long road back” to anything akin to the vibrant economy it enjoyed before a global crude glut caused oil prices to plummet and local jobs to vanish, the report suggests.
The area has lost roughly 16,000 jobs -- about one of every six -- since mid-2014 as low crude prices sparked layoffs and work slowdowns throughout the oil industry.
“This is more than 2 1/2 times worse than what U.S. employment declined during the Great Recession over 2008-09,” Scott says in the report.
Here, according to the report, is how some local companies have dealt with the downturn:
Edison Chouest, a Galliano-based company that builds and operates oilfield supply boats, cut the number of workers at its LaShip yard in Houma in half to 500. One hundred of the company’s 250 boats are are docked, and its mariners are working about half the time they did before the collapse. Employment at Chouest’s North American Shipyard in Larose has declined from about 500 to 200. Its North American maintenance facility at Port Fourchon remains open with about 300 workers.
Chett Morrison, a Houma-based fabrication company, cut its workforce from 515 to 320.
Baker-Hughes closed its 50-person oil services office in Houma.
Hercules Offshore, which operated a fleet of oilfield service boats, declared bankruptcy, closed its Houma yard and laid off 50 people there.
National Oilwell Varco, which builds oilfield equipment, closed its Houma facility at a cost of 80 jobs.
CCHI Aviation closed its Galliano base, laying off 74 pilots, mechanics and support staff.
Offshore Specialty Fabricators began layoffs in May 2016 that cost 67 jobs.
“The bloodbath was obviously not confined to the direct oil and exploration companies but also to tangentially connected companies,” the report says.
KEY TO A COMEBACK
Scott cites several developments as evidence the local economy has hit bottom and is on the path toward slow improvement. The area has posted several months of year-to-year job gains, truck traffic to and from the Gulf oilfield hub of Port Fourchon is picking up, and service companies along the Louisiana coast are planning for growth through 2020. Gulf oil lease sales, though far below historic highs, are on the rise. And many companies are beginning to diversify the kinds of work they do to become less reliant on the oil industry’s boom-or-bust cycles.
But the key to any comeback is the same thing it has been for decades: the price of crude oil.
It’s notoriously difficult to predict long-term crude prices because so many variables affect them -- political and regulatory decisions, production activity by major suppliers like the U.S. and OPEC, economic conditions or unrest in far-flung parts of the world, and global supply and demand. As a result, analysts’ and predictions vary significantly.
Scott predicts oil will rise from an average $65 a barrel this year to $80 a barrel by 2020. Whether that happens will have major implications not just for Houma-Thibodaux but for all of Louisiana.
“Because Louisiana is the country’s second-largest producer of crude oil, if offshore crude is counted in the number, movements in oil prices can often dramatically impact the state, as Louisiana has learned with a vengeance since late 2014,” Scott says in the report. “The huge decline in oil prices from late 2014 through much of 2017 hammered Louisiana’s oil patch so hard that it sent the state into a 28-month recession and a loss of 23,300 jobs (-1.2 percent). Louisiana desperately needs oil prices to both rise and stay high for an extended period for a drilling recovery in the Gulf of Mexico and a revival of the state’s oil-centered metropolitan areas.”
-- Executive Editor Keith Magill can be reached at 857-2201 or keith.magill@houmatoday.com.
Officials Tout Tourism’s Benefits Locally, Statewide
Lt. Gov. Billy Nungesser joined Terrebonne Parish officials today to highlight tourism’s contribution locally and statewide.
“The tourism industry continues to grow in a time when a lot of other industries are suffering in Louisiana,” Nungesser said during a brief celebration at Terrebonne’s tourist center in Gray. “It is a shining bright light for Louisiana.”
Nungesser, who is making stops across the state for National Tourism Week, said 2017 was the sixth straight year of record-breaking tourism numbers in Louisiana.
The state welcomed 47.1 million visitors last year, up nearly 500,000 compared to 2016, according to numbers from the tourism and travel research firm DK Shifflet. Those visitors spent $17.5 billion, an average of $371 per person.
The travel and tourism industry generated $1.8 billion in state and local sales tax revenue, an increase of 4.5 percent from 2016, Nungesser said. That revenue represents a 37-to-1 return on investment of state funding. Tax revenue generated through travel and tourism spending saves each household in Louisiana $1,047 a year in taxes that would be needed to maintain current services.
Nungesser also discussed the state’s new branding campaign -- Louisiana: Feed Your Soul, saying it conveys to the world that no other state can offer the bounty of food, music, history and culture Louisiana can.
“This exciting new brand will offer travelers a new outlook – that you may come to Louisiana hungry, but you’ll leave with your soul full of all the rewarding experiences we offer,” he said. “There is truly nowhere else in the world that can feed your soul like we can.”
Here are some other statistics he and local tourism officials offered today:
- Last year, 14.3 million airplane passengers traveled into and out of the state, up 6.7 percent from 2016. It was the first year of direct, international flights from London and Frankfurt, Germany, into Louis Armstrong International Airport in New Orleans.
- In Terrebonne, visitors spent $189.5 million and supported 2,680 jobs in 2016, according to the latest figures available. People from 48 states and 33 countries visited.
- U.S. Bureau of Labor Statistics data shows 236,300 jobs resulted from visitor spending in Louisiana in 2017. That means one of every 8.5 working adults in Louisiana is employed as a result of the tourism industry.
- Since 2007, tourism is the second fastest-growing job sector in Louisiana, increasing more than 20 percent since then and adding more than 40,000 jobs to the state’s workforce.
LADIES: College scholarship applications being accepted
HOUMA – The Women’s Business Alliance is now accepting applications for its 2018 Academic Scholarship Program.
The program is available to two types of female students pursuing higher education: the 2018 graduating high-school senior and the non-traditional student. The nontraditional student is one age 25 or older who has returned to a Louisiana college to pursue a degree. Applicants must be residents of Terrebonne and/or Lafourche Parishes.
Additional criteria for graduating seniors include a cumulative grade-point average of at least a 3.0 and be entering a Louisiana college during the 2017 year. Nontraditional applicants must have completed one semester of college and have a cumulative GPA of at least 3.0. All applicants should visit www.wbahouma.org for further application requirements.
The scholarship program embodies the Women’s Business Alliance mission of improving the quality of life for women by empowering them in professional endeavors and personal relationships. The scholarship, awarded annually, aims to assist future women business leaders in pursuing their educational goals.
The application form and guidelines can be downloaded from www.wbahouma.org. Submission deadline for applicants is April 15, 2018.
Contact:
Crystal Gienger
Scholarship Chair, Women’s Business Alliance
(985) 448-7937
APPLICATION PERIOD NOW OPEN FOR CEO ROUNDTABLES
LED program provides platform for small business leaders to work on, rather than in, their businesses
Louisiana Economic Development opened the application period today for CEO Roundtables, a popular peer program through which executives explore business challenges with each other under the guidance of an experienced facilitator. The application period will extend through March 31 for roundtables beginning July 2018.
Launched in 2014 to help established small businesses grow revenue and jobs, LED’s regional CEO Roundtables convene 15 to 18 qualified key decision-makers from the pool of applicant businesses. Participants meet 10 times for peer-to-peer learning, business networking and support in the yearlong program. Collaborative and growth-oriented, the meetings support a trusting environment in which executives explore business and personal solutions that spur business growth.
LED'S STEP GRANT OFFERS TRAVEL EXPENSE REIMBURSEMENTS FOR OFFSHORE EUROPE - SEPTEMBER 5-8, 2017 - ABERDEEN, U.K.
About Offshore Europe 2017
Offshore Europe features over 56,000 attendees and offers Louisiana companies an opportunity to engage directly with international market leaders and innovative technology companies. As Europe’s leading energy and petroleum event, the conference attracts global audiences of engineers, technical specialists and industry leaders. The 2017 conference will be held at the Aberdeen Exhibition and Conference Center and is organized by the Society of Petroleum Engineers.
STEP Grant Opportunity
LED’s STEP Grant will offer travel expense reimbursements of up to 75 percent for new-to-export companies and up to 50 percent for market-expansion companies, for total assistance of up to $2,500 per company for attending Offshore Europe.
Learn more about utilizing the STEP Grant for Offshore Europe by clicking here or by calling
Sheba Person-Whitley - Senior International Trade Manager
International Commerce Division - Louisiana Economic Development
T 225.342.2537
C 225.772.2981
Sheba.Person@la.gov
617 North Third Street
Baton Rouge, Louisiana
Louisiana Contractors Accreditation Institute - Classes starting Soon
Registration begins June 26, 2017 and last day to register for class will be September 11, 2017.
The Louisiana Contractors Accreditation Institute, a partnership between Louisiana Economic Development, Louisiana Community & Technical College System and the Louisiana State Licensing Board for Contractors offers small and emerging construction Businesses critical information about construction management and how to prepare for the Business Law parts of the contractors state licensing exam.
What are the Safest Cities in Each State? Schriever, Bayou Blue, Bayou Cane and Gray all ranked as one of the safest!
LendEDU recently released a report that highlighted the safest cities in Louisiana and Schriever, Bayou Blue, Bayou Cane and Gray all ranked as one of the safest.
Using licensed data, each city’s crime index was rated against the state and national average crime index.
The full report and a more detailed methodology can be found here: https://lendedu.com/blog/safest-cities-state/
How does Louisiana rate among the other 50 states on property taxes?
Where Does Your State Stand?
Louisiana is #38
Effective Tax Rate: 0.71%
Average Home Value: $183,591
Average Property Tax: $1,302
Highest Average Metro Property Tax: New Orleans, $1,864
Total Single-Family Homes: 1,303,899
Total Property Taxes: $1,698,204,632
American homeowners paid property taxes totaling nearly $278 billion in 2016, according to a new report from ATTOM Data Solutions, the nation's largest property database. That means that each of the country's 84 million single-family homeowners paid an average of $3,296 in property taxes, which amounts to an average 1.15% effective tax rate.