No one should be surprised that 2020 was a rough year for Lafayette’s economy. But some new data from the federal government highlights just how bad it was for most — but not all — industries. Overall Lafayette’s economy lost almost a billion dollars, its worst drop in gross domestic product since the oil bust in 2014.
While obviously skewed by fallout from the pandemic, the numbers from the U.S. Bureau of Economic Analysis highlight how much harder it’s going to be for Lafayette to dig its way out as the local oil industry continues to contract.
Lafayette Parish lost $900 million in GDP last year
Lafayette Parish’s GDP peaked at an all-time high of $15.4 billion in 2014. The oil bust reduced output by more than $1 billion in 2015 and again in 2016. The following three years saw steady increases, giving signs of hope for recovery. Then 2020 happened.
The pandemic collapse caused Lafayette Parish’s GDP to fall to $13.4 billion. On a per capita basis, that’s a loss of $3,750 in economic output in a single year for every person who lives here.
Lafayette’s MSA lost $1.2 billion in GDP
Lafayette Parish is the region’s economic engine, so the broader metro area took a big hit too. St. Mary and Vermilion parishes, like Lafayette, saw losses, shaving $220 million and $110 million, respectively. But Acadia and Iberia parishes managed to squeak out small gains in 2020, up roughly $10 million and $20 million, respectively. Overall this $1.2 billion loss puts the Lafayette MSA’s GDP at $3.2 billion less than it was at its $15.4 billion peak in 2014.
Lafayette’s oil and gas industry was almost cut in half, again
A big driver in all of this is a sustained decline in the region’s oil and gas industry. In 2014, oil and gas extraction accounted for $2.6 billion of Lafayette Parish’s GDP. After cratering to $1.1 billion by 2016, the industry’s output plateaued at $1.2 billion ahead of the pandemic.
This total fell to $600 million in 2020, hundreds of millions less than in any year since 2001, which is as far back as this dataset goes. Other parishes in the MSA didn’t fare much better. Since 2014, Acadia Parish’s oil and gas output fell by 92%, Vermilion Parish fell by 82%, and Iberia Parish by 63%. The best performer has been St Mary Parish, which saw a 43% decline in oil industry GDP.
These are more points on what’s become an increasingly clear trend that the heydays of oil and gas as a primary driver of Lafayette’s regional economy are growing ever more distant in the rear view mirror.
Construction in Lafayette Parish was at an all-time high of $750 million
This GDP data isn’t all bad news, as the construction sector of Lafayette Parish’s economy achieved an all-time high in 2020, increasing more than $100 million from 2019’s total of $650 million. This is the most GDP this industry has generated since at least 2001. It remains unknown whether this increase was emblematic of a rash of home improvements, the continued development of smaller cities in the parish and a few mega projects like the Amazon fulfillment center or part of a larger and hopefully longer-term trend.
Retail hit an all-time high while arts and entertainment fell to 2008 levels
While output dipped overall, the retail sector has continued to report record sales. So it’s no surprise to see substantial GDP growth among retailers in Lafayette Parish, which hit $1.23 billion, up $60 million from 2019.
Also not a surprise: Arts and entertainment took it on the nose. The sector sustained losses of nearly $100 million in 2020, a 20% drop off. The last time arts and entertainment GDP was this low was way back in 2008.
Not good news, but we don’t yet know how bad it is
Getting a picture of the post-pandemic recovery is tricky. County/parish-level GDP data is delayed by almost a year, so we won’t know how Lafayette rebounded in 2021 until December 2022. To be sure, 2020 was obviously an aberration, a black swan event that had an extreme global impact.
Even if its acute impacts are temporary, it’s likely going to take years to recover from 2020 — as has been projected by UL economist Gary Wagner in his quarterly economic outlook report.
Lafayette still hasn’t recovered from 2014, even accounting for the pandemic, and this new downturn hit right as it seemed like our economy was starting to get its legs underneath it again.
Whether 2020 was the kind of event that will drag down Lafayette’s economy for years to come is still unclear. However you look at it, the hole Lafayette fell in after 2014 got deeper last year.
If you want to examine this and other economic data for yourself, check out BEA’s interactive data tables here.
Click on GDP by County and Metropolitan Area then GDP in current dollars, select County, Louisiana, click on the parishes you want to examine and then select the years. If you find something else interesting in this data, drop me a line at [email protected]