Louisiana’s economic growth lags U.S. overall, but tops several other southern states in 3Q

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Louisiana’s economy grew more slowly in the third quarter of 2022 than the national economy as a whole, continuing a trend of the past several years that has seen the state lag others in economic performance.

The state’s real gross domestic product grew by 2.5% on an annualized basis in the third quarter, compared to the national economic growth rate of 3.2%, according to figures released Friday by the Commerce Department’s Bureau of Economic Analysis.

Gross domestic product is a measure of all the goods and services the state produces.

While Louisiana’s economy grew more slowly than the national average, it didn’t lag other states by as much as it did earlier this year or in 2021. The state, in fact, performed better than more than half the states in the country, ranking 23rd out of 50.

But the relative improvement in economic growth is less a reflection of a robust Louisiana economy than it is indicative of a slowdown in the nation’s post-pandemic economic rebound, according to experts.

“Louisiana has always been countercyclical so it’s not surprising that in a weak national economy heading towards a mild recession that we’re hanging in there,” said Tulane University business professor Peter Ricchiuti.

Oil & Gas fuels growth

The mining industry was the leading contributor to the increases in real GDP in the seven the states that led the nation in economic growth, including the top three — Alaska, Texas and Oklahoma.

Increased activity in oil and natural gas, particularly natural gas, is behind Louisiana’s growth as well, Ricchiuti said.

Driven by demand in Europe and Asia, the Gulf Coast is preparing for $116 billion in LNG investments, most of which is set for Louisiana. Increasing European demand led to a flurry of new LNG contract announcements earlier this year, though energy demand could be hindered by a recession induced by rising interest rates.

Other leading contributors to the increase in real GDP nationally were information services, professional services and scientific and technical services, according to the Commerce Department.

In Louisiana, tourism and hospitality are continuing to rebound from the pandemic, officials have said, but hotel occupancy still trails pre-COVID levels.

Relative rankings

Louisiana outperformed more than half of the 12 southeastern states, including Alabama, Arkansas, Kentucky, North Carolina, South Carolina, and Virginia. While those states still saw some economic growth, Mississippi’s economy contracted by 0.7%.

The state didn’t fare so well in terms of how personal income growth compared to other states. Though all 50 states saw personal income growth in the third quarter, Louisiana’s rate of growth, at 2.5%, was only about half that of the nation as a whole, which was 5.3%. 



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