The gist: A new economic forecast projects that the Lafayette metro area will lead the state in jobs lost from the first quarter of this year to the second. Modeling by economist Gary Wagner of UL Lafayette’s B.I. Moody III College of Business Administration shows the area recovering less than 10% of those jobs over the next 18 months.
How to lose almost 44,000 jobs in just a few short months. In the first quarter of 2020, Wagner’s analysis shows the Lafayette metro area (which also includes St. Martin, Acadia, Iberia and Vermilion parishes) supporting 203,000 jobs. By the second quarter, that number is projected to fall to 159,200.
That’s a drop of 21.5%, which would lead the state. The second-highest loss in his forecast is the Houma-Thibodaux MSA at 17.9%. Every metro is projected to get pummeled; the lowest rate of projected job losses is the Hammond MSA at 12.3%.
From the third quarter 2020 to third quarter 2021, Wagner projects a net gain of only 3,900 jobs in the Lafayette MSA. That would mean recovering less than 10% of the jobs lost, largely due to the continued stagnation of the oil and gas industry.
No MSA in the state is expected to fully recover by next year. The highest projected rate of recovery is in the New Orleans MSA, where Wagner estimates half of the jobs will return.
The air was already leaking out of Lafayette’s job balloon before coronavirus arrived. Wagner’s data shows that the total number of jobs in the Lafayette metro shrank from 203,400 to 203,000 from the first quarter 2018 to the first quarter 2020. So Lafayette’s economy was stagnant before getting punched in the gut by COVID-19.
Of course, these challenges aren’t unique to Lafayette or Louisiana. “What I’m projecting for Louisiana is really not anything different from the U.S. economy,” says Wagner. “What I’m projecting is that our recovery is going to be slower.” In fact, the 36 million initial unemployment claims filed nationwide since the middle of March mean that all the jobs that have been created since the last recession ended in 2009 have been wiped out and then some — in less than two months.
As bad as these projections are, the reality could be even worse. For the statewide data in Wagner’s report, he includes scenarios ranging from optimistic to pessimistic, but these metro jobs projections are based on baseline numbers. He estimates a 15% chance of an optimistic scenario, but a 30% chance that won’t be the case. That pessimistic scenario includes more stay-at-home orders and the price of oil stuck below $40 per barrel for the foreseeable future. If that happens, we could lose even more jobs and regain less ground than the numbers listed here.
This gloomier outlook could happen even if the coronavirus doesn’t resurge in Louisiana. “The pessimistic scenario doesn’t necessarily mean that we have to have a resurgence or more stay-at-home orders in Louisiana,” says Wagner. “These could be stay-at-home orders that could be anywhere around the world as Lafayette’s oil and gas industry is tied to the global economy. So if other places are being affected, that impacts us.”
Needless to say, we’re facing unprecedented economic challenges. “Every single variable I’m looking at is just off the charts in terms of the historical past,” says Wagner.
These projections only account for payroll jobs. So it doesn’t factor in independent contractors or gig workers or people who live in Lafayette but work for companies based elsewhere. But it’s still devastating to be on track to lose around 40,000 payroll jobs in our metro area for the foreseeable future.
What to watch out for: On Friday, April’s state-level unemployment data comes out. Wagner suggests that Louisiana’s unemployment rate could hit 30%, citing the more than 600,000 people in the state who applied for initial unemployment claims between March 21 and May 9. For more information on this report and to sign up to be notified when Wagner updates this report quarterly, check out his website.