Economic Forecast
for Northeast Louisiana
Presented to the Business Outlook Summit
Monroe, Louisiana
March 29, 2007
Dr. Robert Eisenstadt
University of Louisiana-Monroe
Dr. John Francis
Louisiana Tech University
The measured labor force in NE Louisiana has fallen:
Civilian Labor Force data -- July household survey data figures 2004-2006
Civilian Labor Force
Jul-06
131,898
70,973
17,941
11,182
10,218
1,894,119
153,208,000
RLMA 8
Ouachita
Lincoln
Morehouse
Union
Louisiana
United States
Source: www.laworks.net, Department of Labor
(monthly, not seasonally adjusted)
*July 2006 is a preliminary figure, 2004 and 2005 figures are revised
Jul-05
139,774
74,017
18,891
12,094
10,662
2,158,929
151,122,000
2005-2006 change
in labor force = -5.6%
Jul-04
139,612
73,811
18,794
12,318
10,705
2,098,395
149,217,000
in employment = -2.0%
Employment
Jul-06
126,795
68,689
7,071
10,568
9,895
1,827,222
145,606,000
RLMA 8
Ouachita
Lincoln
Morehouse
Union
Louisiana
United States
Source: www.laworks.net, Department of Labor
(monthly, not seasonally adjusted)
*July 2006 is a preliminary figure, 2004 and 2005 figures are revised
Jul-05
129,363
69,300
7,406
10,911
9,983
2,024,129
143,283,000
Jul-04
129,011
69,348
7,336
11,031
9,990
1,964,192
140,700,000
Unemployment, however, is not the issue it used to be…..
(figures from July 2006 household survey, not seasonally adjusted)
Unemployment in Ne Louisiana
12,000
10,41110,601
10,000
8,000
Jul-06
Jul-05
6,000
Jul-04
5,103
4,717 4,463
4,000
2,284
2,000
1,252 1,258
1,183 1,287
666
614
323
679
715
0
RLMA 8
Ouachita
Lincoln
Morehouse
Union
Unemployment Rates NE LA, LA, US
12.0%
10.4%
9.8%
10.0%
8.0%
7.5%7.6%
6.4%
6.0%
6.6%6.7%
6.2%6.4%
5.5%
6.0%
5.7%
5.0%5.2%
3.2%
3.7%
3.2%
3.5%
2.0%
0.0%
RLMA 8
Jul-06
Jul-05
Jul-04
3.9%
4.0%
6.4%6.7%
Ouachita
Lincoln
Morehouse
Union
Louisiana
United States
Employment gains and losses (establishment survey)
Net change in employment data from establishment data
year-qtr
2006-2
2005-2
2004-2
2005-2006
change
2004-2005
change
New Orleans Baton Rouge
(RLMA 1)
(RLMA 2)
477,750
408,226
605,447
392,154
608,264
383,775
Houma
(RLMA 3)
93,150
88,857
87,845
Lafayette
(RLMA 4)
262,194
248,054
243,506
Lake Charles
(RLMA 5)
112,994
113,409
110,151
Alexandria
(RLMA 6)
107,051
104,126
101,217
Shreveport
(RLMA 7)
235,175
230,368
225,729
Monroe
(RLMA 8)
112,003
111,739
113,614
-127,697
16,072
4,293
14,140
-415
2,925
4,807
264
-2,817
8,379
1,012
4,548
3,258
2,909
4,639
-1,875
Data from the 2005-2 Job Vacancy Survey for NE
Louisiana: What a difference a year makes.
Job Vacancy
Survey:
reported
vacancies in
2005-2
change in
employment
2005-2 to 2006-2
(unfilled "vacancies")
or excess hires
education and health services (32713)
627
119
(508)
Trade, transportation utilities (22199)
521
300
(221)
Professional and business services
(8955)
286
500
214
Other services (3177)
245
36
(209)
Financial activities (6301)
188
(27)
(215)
Construction (5665)
136
239
103
Manufacturing (12526)
92
(877)
(969)
Leisure and hospitality (9117)
50
171
121
Natural resources/mining (2644)
29
(226)
(255)
information (2108)
0
35
35
Public administration (6246)
12
(14)
(26)
Employment category (total 2005-2
employment)
From the 2005 (quarter 2) Job Vacancy Survey
www.laworks.net
In trying to fill this position what is the
greatest difficulty you have faced?
Unable to find qualified applicants = 20.7%
Shortage of people in occupational category = 11.0%
Not enough applications submitted = 14.6%
Applicants will not work for offered compensation = 8.5%
Applicant cannot pass drug or background check = 7.3%
No difficulty at all = 8.5%
Skill Composition of NE
Louisiana Labor Force
Skill Composition of NE Louisiana Labor Force
Some College,
19.4%
Bachelor's
Degree, 10.7%
More than a
Bachelor's, 4.5%
HS Degree-No
College, 37.6%
No HS Diploma,
27.7%
40.0%
Comparison of Skills with
State and National Levels
35.0%
30.0%
25.0%
United States
Louisiana
NE Louisiana
20.0%
15.0%
10.0%
5.0%
0.0%
No HS Diploma
HS Degree-No
College
Some College
Bachelor's
Degree
More than a
Bachelor's
Composition of Labor Force
100%
90%
34.6%
80%
46.7%
70%
56.0%
60%
Beyond High School
HS Diploma or Less
50%
40%
65.3%
30%
53.3%
20%
44.0%
10%
0%
US
Louisiana
NE Louisiana
Rankings of Proportion of State Labor Force
without a High School Diploma
Rank
1
2
3
4
5
…
45
47
49
50
51
State
Percentage
Texas
21.1%
Louisiana
20.1%
California
19.9%
Nevada
19.8%
New Mexico
19.7%
…
…
Minnesota
10.8%
Vermont
10.4%
Alaska
10.0%
New Hampshire
9.5%
Hawaii
9.0%
Ranking of Proportion of State Labor Force
with Some Training Beyond High School
Rank
1
2
3
4
5
…
45
47
49
50
51
State
Percentage
Alaska
62.7%
North Dakota
62.9%
Washington
63.7%
Minnesota
64.8%
District of Columbia
65.5%
…
…
Alabama
49.3%
Arkansas
48.7%
Louisiana
46.7%
Nevada
46.1%
West Virginia
44.7%
Labor Force Participation Rate
• Louisiana – 71.3%
• Ark-LA-Miss – 73.7%
• United States – 78.3%
• LA is well below the national average
Ranking of State Labor Force
Participation Rates
Rank
1
2
3
4
5
…
45
47
49
50
51
State
Percentage
South Dakota
86.6%
Nebraska
86.5%
North Dakota
86.1%
Iowa
85.5%
Minnesota
85.3%
…
…
New York
73.6%
Alabama
72.3%
Mississippi
72.2%
Louisiana
71.3%
West Virginia
68.1%
Labor Force Participation
Rates by Education Groups
100.0%
90.0%
80.0%
70.0%
60.0%
United States
50.0%
Ark-LA-Miss
Louisiana
40.0%
30.0%
20.0%
10.0%
0.0%
No HS Diploma
HS Degree -- No
College
Some College
Bachelor's Degree
More than a Bachelor's
Wage Inequality
• Why Does Wage Inequality Matter?
• Equity
• Some evidence that it reduces overall
consumption and economic growth
90-10 Wage Ratios
8.00
7.00
6.00
5.00
United States
Louisiana
4.00
NE Louisiana
3.00
2.00
1.00
0.00
2002
2003
2004
2005
90-50 Wage Ratios
3.00
2.50
2.00
United States
1.50
Louisiana
NE Louisiana
1.00
0.50
0.00
2002
2003
2004
2005
Distribution of Weekly Wages
$900.00
$787.74
$800.00
$738.51
$700.00
$640.04
$600.00
$500.00
United States
Louisiana
NE Louisiana
$400.00
$327.70
$295.40
$300.00
$256.02
$200.00
$118.16
$103.39 $98.47
$100.00
$10th Percentile
50th Percentile
90th Percentile
Post-Katrina gains in retail sales are strong:
Estimated non-automotive retail sales for Ouachita parish
$2,250,000,000
$2,199,581,097
$2,208,213,098
$2,200,000,000
$2,150,000,000
$2,100,000,000
$2,050,000,000
$2,073,886,683
$2,047,923,335
2004
2005
2006
$2,001,965,499
$2,000,000,000
$1,950,000,000
$1,911,473,395
$1,900,000,000
$1,850,000,000
2004-05: 4.7% increase
2004-05: 1.3% increase
$1,800,000,000
2005-06: 9.9% increase
2005-06: 6.5% increase
$1,750,000,000
current $ estimates
constant (2007) dollar estimates
Lincoln Parish Non-auto Retail Sales 2004-06
$700,000,000
$640,256,675
$637,663,006
$600,000,000
$556,524,952
$536,949,526
$500,000,000
$ 5 7 0 , 4 16 , 9 3 2
$ 5 3 2 , 3 17 , 7 4 8
$400,000,000
2006
2005
$300,000,000
2004
$200,000,000
$100,000,000
2005-06 change=18.8%
2005-06 change=15.0%
$0
current $
constant $
Real per-capita non-auto estimated retail Sales (US 2005 = $8,516)
constant 07 $
Ouachita
Lincoln
2006
$14,742
$15,143
2005
$13,990
$12,698
2004
$13,815
$12,642
2004 Per capita personal income
Ouachita: $26,595 Lincoln: $23,003
Year over year percentage
(3-month running average) change
in estimated retail sales for
Ouachita Parish
18.00%
16.00%
14.00%
12.00%
10.00%
current $ 2005-06
change
8.00%
6.00%
constant $ 2005-06
change
4.00%
2.00%
0.00%
ry
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p
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au
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d
n
s
january
february
march
april
may
june
july
august
september
october
november
december
current $ 2005-06 change
7.81%
9.39%
13.86%
17.05%
16.57%
13.56%
10.98%
10.50%
7.10%
4.22%
4.53%
5.77%
constant $ 2005-06 change
4.04%
5.52%
9.87%
13.09%
12.44%
9.19%
6.49%
6.15%
3.62%
1.78%
2.70%
3.75%
Car, van and light truck sales are quite stable and show some gains
Total Car, Van and Light Truck Registrations
2004
2005
2006
chg 04-06
NE LA
14,925
15,154
15,163
238
Ouachita
6,527
6,862
6,725
198
Lincoln
1,913
1,926
1,978
65
Morehouse
1,185
1,012
1,036
-149
Union
1,033
1,057
978
-55
Louisiana
240,203
260,050
294,253
54,050
Non-Fleet Car, Van and Light Truck Registrations
2004
2005
2006
chg 04-06
NE LA
14,181
14,450
14,486
305
Ouachita
6,108
6,408
6,326
218
Lincoln
1,759
1,808
1,823
64
Morehouse
1,143
988
1,010
-133
Union
1,011
1,025
961
-50
Louisiana
216,834
234,061
266,860
50,026
estimated constant $ auto sales 2004
$
249,853,005
Ann % change
estimated constant $ auto sales 2005
$
251,614,036
0.7%
estimated constant $ auto sales 2006
$
238,254,422
-5.3%
2006 permits for construction projects are well ahead of 2005
levels in both number, square footage, and real estimated value.
Ne w Construction Pe rmits - Ouachita, Union Parishe s
2100
1800
1500
1200
900
600
300
0
2016
2006
1421
2005
815
596
Total projects
Total square footage
(000's)
Value of new construction permits (current and constant
2007 $)
$300.0
$250.0
$200.0
$150.0
$100.0
$50.0
$-
$253.6
$252.6
$206.7
$214.2
2006
2005
All permits (millions
current $)
All Permits (millions of
costant 2007 $
Existing home sales (all homes > $50,000)
Closing Prices 2003-2006
$ 153,938
$ 153,613
$ 15 5 , 0 0 0
$ 149,711
$ 149,127 $ 148,869
$ 15 0 , 0 0 0
$ 148,869
avg p rice 2 0 0 3
avg p rice 2 0 0 4
$ 14 5 , 0 0 0
$ 140,202 $ 140,280
avg p rice 2 0 0 5
$ 14 0 , 0 0 0
avg p rice 2 0 0 6
$ 13 5 , 0 0 0
$ 13 0 , 0 0 0
current $
constant $
Per Square Foot Prices 2003-2006
$ 75.04
$ 76. 00
$ 74.55
$ 75.33 $ 75.04
$ 72.98
$ 74. 00
$ 72. 00
$ 70. 00
$ 75.47
$ 68.88
avg ppsqf t 2 0 0 3
avg ppsqf t 2 0 0 4
avg ppsqf t 2 0 0 5
$ 69.85
avg ppsqf t 2 0 0 6
$ 68. 00
$ 66. 00
$ 64. 00
current $
constant $
Homes sold are for Ouachita and contiguous parishes. NE LA Board of Realtors. (constant 2006 $.)
Existing Home Sales: Closing price > $200,000
Av g closing price for home s > $200,000
$310,000
$305,000
$300,000
$295,000
$290,000
$285,000
$280,000
$275,000
$270,000
$265,000
$260,000
$304,585
$ 2 9 9 , 18$93 0 0 , 4 19
$ 2 9 1, 0 3 1
$288,558
$288,558
price 2003
price 2004
$280,341
$277,994
price 2005
price 2006
current $
constant 2006 $
Price per Square Foot
$106.00
$104.00
$102.00
$100.00
$98.00
$96.00
$94.00
$92.00
$90.00
$88.00
$ 10 4 . 7 1
$ 10 1. 3 6
$ 10 2 . 10
$ 10 1. 3 6
$ 10 0 . 3 8
$98.91
ppsqft 2003
ppsqft 2004
ppsqft 2005
$95.57
$94.06
current $
ppsqft 2006
constant 2006 $
Home sales: closing price $50k - $200k
Homes sold $50k-$200K: average selling price
$130,000
$127,550
$128,000
$126,000
$124,106
$124,000
$123,417
$122,000
$120,000
$119,854
$118,000
$116,000
$119,854
$119,560
2003
2004
2005
2006
$116,288
$116,415
$114,000
$112,000
$110,000
sold price current $
sold price constant 2006 $
Homes sold $50k-$200k: average price/square foot
$72.00
$70.99
$71.00
$70.12
$70.00
$69.57
$69.75
$69.57
$69.00
$68.00
$67.57
2003
2004
2005
2006
$67.00
$65.70
$66.00
$65.00
$64.79
$64.00
$63.00
$62.00
$61.00
ppsqft current $
ppsqft constant 2006 $
Ouachita and Lincoln Parishes gain population in 2006
Ouachita = +1,551; Lincoln=+539
July 1st
NE LA
306,775
306,875
311,163
1-Jul-06
1-Jul-05
1-Jul-00
Population estimates for 2000, 2005, 2006
Ouachita
Lincoln
Morehouse
Union
149,788
42,647
29,715
22,199
148,237
42,108
29,989
22,901
147,232
42,482
30,983
22,780
Louisiana
4,287,768
4,523,628
4,469,495
Source: U.S. Census Bureau
Percent Change in Population 2000-2005 and 2005-2006 for NE Louisiana, the
State of Louisiana, U.S.
6.00%
5.06%
4.00%
RLMA 8
2.00%
0.68%
1.21%
1.05%
0.98%
-0.03%
0.00%
% Change for 2000 to 2005
-2.00%
% Change for 2005 to 2006
-1.38%
-4.00%
-6.00%
-5.21%
Ouachita
Lincoln
Morehouse
Union
Louisiana
United States
Thank God for Babies…………….
Net Migration 2000 to 2005
Lincoln
Morehouse
Ouachita
Union
Louisiana
Net International
In-Migration
295
3
247
86
20,174
Net Domestic InMigration
(1,818)
(1,460)
(4,134)
(316)
(89,547)
27,262 babies (8.8% of 2000 population)
were born in NE Louisiana between
2000 and 2005.
Looking ahead to 2008…
Guide plant Closure: estimated (approximate) long-run impact of closure on region,
everything else equal
Change in household income
Change in employment
avg annual wage/job
Direct effect
$53,000,000
800
$66,250
Indirect effect
$50,164,500
1694
Total estimated
impact
$103,164,500
2494
Impact % of NE
total
3.2%
1.9%
Forecast Medium Term Outcome 2007-08
gains (construction driven)
Jobs
625
Wage/salary
income
$18,600,000
losses
direct loss due to closure of Guide
Medium term (1st year) indirect losses
-800
-725
($53,000,000)
($23,000,000)
Net medium term job increase/decrease
Forecast unemployment rate and change in income
-900 ($57,400,000)
4.5-5.0%
-1.8%