Tracking the

Economic Impact of COVID-19

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

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. 

The Creative Economy

Comprised of industries like film, fashion, and advertising, and occupations such as artists, musicians, photographers, and performers, the creative economy has suffered greatly. From April to July, 2020, within the New Orleans Metro area, more than 12K jobs were lost across the creative industry and more than 10K were lost amongst creative occupations. Additionally, estimated monthly sales within the industry were $469M and $283M in cumulative monthly earning.

Unemployment Claims by Race and Gender

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.

Unemployment Claims by Race and Industry

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 Spending

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%.

We recognize that small businesses are the backbone of the economy. Nationally, minority-owned small businesses with employees accounted for more than 8.7 million jobs and generated more than $1 trillion in economic output. In addition to historic systemic issues that negatively affect minority-owned small businesses, the global COVID-19 pandemic “could disproportionately affect minority-owned small businesses for two critical reasons: they tend to face underlying issues that make it harder to run and scale successfully, and they are more likely to be concentrated in the industries most immediately affected.” According to a recent McKinsey survey, 58% of minority-owned small businesses are concerned about the financial health of their business, more than half have conducted layoffs, furloughs or completely shut downs. Additionally, a high concentration of minority-owned small businesses are in industries that are most vulnerable to the pandemic, including accommodation and food services and retail.

Small Businesses Open

The pandemic has severely impacted the local small business ecosystem. When we compare data from January 2020 to now, the number of small businesses open have decreased by 33.4%. *Note: This data is based on businesses that had a final transaction (credit, debit) where a purchase of goods was made.

Small Business Revenue

Revenue for small businesses has also been severely restricted due to the pandemic. Revenue for small businesses has decreased by 48.6%, with leisure and hospitality taking the hardest hit with a decrease of 81.3%.

Unique Job Postings

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: 

  • The purpose of this tool is not data analysis, but data accessibility for forecasting the impact of COVID-19 with interactive features.
  • This dashboard is a work in progress focused on providing time-sensitive data in an interactive format, NOLABA intends to update data and validate it as we learn more about the economic impact of COVID-19. 
  • Publicly accessible data has a lag time, meaning that the effects of COVID-19 may not show in much of the economic data sets traditionally tracked; it may take several months to fully understand the scale of the impact. As a result, we used job postings data to show near-real-time impact on the labor market of the City of New Orleans. 
  • The data shown is the most recent data provided and pulled from publicly accessible sources. Given the lag time of publicly accessible data, the data provided in this tool may have a lag in timeframe and vary by measurement.

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.

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New Orleans, LA 70113 | 504.934.4500