One of our commitments to the New Orleans community has been to provide unbiased, objective economic development information. We do this to help inform public policy and to ensure that businesses, job candidates, and stakeholders are equipped with the best information to ensure that New Orleans becomes the most attractive city of its size for financial and human capital investment. COVID-19 has only underscored the fierce urgency of this enduring commitment.
To shed light on the current economic crisis and forecast ways to combat its effects, The New Orleans Business Alliance is piloting a new dashboard, to be updated monthly, focused on data which identifies tension points related to revenue and industry growth in New Orleans' top six industries – accommodation and food services; mining, quarrying, and oil and gas extraction; retail trade; professional, scientific, and technical services; real estate, rental. and leasing; and wholesale trade.
The impact outlined in the dashboard is derived from the recent Deloitte report which points to an 8.3% dip in GDP for 2020, as well as the Opportunity Insights' Economic Tracker which highlights a drastic reduction in consumer spending. Navigating out of the recession is a key focus, and this analysis may be used to acquire potential strategic gains as the global economy shifts and reorders itself in light of COVID-19.
Total unemployment claims in New Orleans have been consistent. Six weeks prior to the reopening, the city averaged 46,000 total unemployment claims. We have averaged 44,000 total unemployment claims since the city’s reopening. However, within the last month claims have decreased drastically, with the week ending August 8, 2020 being the lowest number of claims (726) since the beginning of the pandemic.
Disaggregated data provides a much fuller look at the economic impact in New Orleans. Data received from the Louisiana Workforce Commission tells us that between March 13, 2020 and June 20, 2020, the pandemic accounted for over 90,000 residents submitting unemployment claims. Within that 90,000, 59% of those residents were Black, 30% were white, 3% were Asian, while 7% chose not to answer.
From an industry standpoint, as expected with the restrictions imposed by the initial shutdown and phased reopening, Accommodation and Food Services was the clear leader in unemployment claims with nearly 30% of total claims. Across five of the six focus industries, including Accommodation and Food Services, Black residents have been most deeply impacted by unemployment.
Consumer confidence and consumer spending are key drivers for the economy, with 70% of the GDP being attributed to consumer spending in 2019. Given our economic reliance on hospitality and tourism, consumer spending holds particular importance in our local economy.
In the New Orleans metropolitan area, as of August 2, 2020, Arts, Entertainment, and Recreation spending by all consumers decreased by 55% compared to January 2020. Restaurant and Hotel spending also decreased by 50.2%. For the same period on the national level, consumer spending across the Entertainment and Recreation Industry decreased by 51.3% while in the Restaurant and Hotel Industry consumer spending decreased by 29.4%.
Across all six focus industries, job postings decreased drastically between June and July in 2019 vs. 2020. Accommodation and Food Services’ job postings dropped significantly due to the pandemic. Professional, Scientific, and Technical Services postings took a drastic decline as well. Over the last 30 days, unique job postings have decreased by 59%.
A few considerations while reviewing the dashboard:
Lastly, we want to acknowledge the efforts of our AVP, Data Analytics and Performance Management, Omar Stanton, in leading this effort. While not scholarly reviewed, we appreciate the input of Joe M. Ricks, Jr., PhD (Xavier University of Louisiana) and Robert Habans, PhD (The Data Center) in helping to refine this first edition.
Deloitte Insights: United States Economic Forecast, 2nd Quarter 2020
EMSI, Q2, 2020 Data Set: Emsi Job Postings (Louisiana Department of Labor)