For economic data nerds like me, Christmas arrives in early December — when the Bureau of Economic Analysis releases the latest county-level data for economic output.
Until a couple years ago, the most granular gross domestic product data you could get was at the metro level, which combines Lafayette with four adjoining parishes. With county-level (parish-level for us) data, we’re able to peer deeper into the economic health of our parish relative to our neighbors, the state and the country.
What does the report say? In short, as of 2021, Lafayette’s economy is in flux. While we are recovering from the pandemic, we’re doing so more slowly than the rest of the state and country. And although we’ve made up ground lost since 2014, it’s not clear what industries will drive growth moving forward.
Lafayette Parish produced its second highest GDP ever
After years of local economic malaise, this was a happy discovery, though not necessarily a surprising one. The only other time Lafayette produced this much economic output was during the 2014 peak, when GDP hit $15.4 billion; last year it was $14.9 billion.
Throughout the pandemic, the federal government has shoveled unprecedented amounts of money to prop up the American economy. Total GDP nationally grew 10.7% from 2020 to 2021 despite work stoppages and other economic hurdles.
By comparison, however, Lafayette’s economy was still relatively sluggish. Our economy grew 7.4% from 2020 to 2021, slower than the national pace and also Louisiana’s statewide average of 11.2%.
And not to look a gift horse in the mouth, but Lafayette’s 2021 GDP is still 2.8% less than it was in 2014, while Louisiana’s GDP was 7.4% higher and the total U.S. GDP was up 32.8% over that same period of time .
So while Lafayette’s economy is doing better, we’re still not keeping up with the rest of the state or the country.
Oil and gas isn’t recovering in Lafayette
While the U.S. oil and gas and mining industry grew its output 66.1% from 2020 to 2021, and Louisiana as a whole saw 89.2% year-over-year growth, Lafayette’s energy economy only grew 2.1%.
This part of the economy is still down nationwide from its 2014 peak, but it’s starkly worse in Lafayette. The U.S. oil and gas sector produced 19.9% less GDP in 2021 compared to the peak in 2014, and Louisiana produced 29.1% less. Meanwhile, Lafayette was down 67.7%.
While I’ve been saying this for a while, the numbers don’t lie. Even though oil and gas will always be a part of Lafayette’s economy, there’s no indication that it will ever recover to its former glory.
Arts, entertainment and recreation are back but not all the way
Unsurprisingly, one of the biggest growth areas from 2020 to 2021 was the arts, entertainment and recreation industry. With so much of those shut down for some or all of 2020, there was really nowhere to go but up. And Lafayette’s 28.7% growth roughly matched the national growth of 35.2% and outpaced the statewide average of 21.9%.
Despite the near-term recovery, Lafayette is still in the hole long-term. Since 2014, this industry grew 15.7% nationally and 13.1% statewide. Yet Lafayette’s output in 2021 remained down 7.4%. In fact, every parish in the metro area is still down from 2014.
Hopefully, this near-term trend helps overcome the mid-term shortfall, especially as Lafayette considers investing in a new performing arts center and our part of the world starts to get more attention as a tourist destination. But this is definitely an important part of our economy we shouldn’t take for granted.
Lafayette doesn’t have any superstar growth industries
As it stands today, it’s not clear what industries are going to power the next phase of Lafayette’s growth. Because none of them are clearly outpacing national averages.
There were a few industries that grew faster from 2020 to 2021 than the national average, but all have caveats.
Management of companies and enterprises — which encompasses companies that hold securities in other companies for the purpose of controlling management decisions and companies that administer, oversee, and manage other businesses in general — grew 32.2% compared to the 8.9% national average. But this sector has still shrunk 39.7% since 2014.
Food and hospitality grew 31.9% compared to the U.S. average of 31.4% from 2020 to 2021, but grew only 21.7% from 2014 to 2021, compared to 36.6% nationally.
Manufacturing year over year grew 20% compared to the national average of 13.8%, but was still down 10.5% from 2014 while the U.S. as a whole was up 20%.
Construction grew 14.1% compared to 5.7% nationally, but still trailed performance since 2014, growing only 38.9% compared to 48.2% across the U.S.
So all of the local industries that outgrew national averages from 2020 to 2021 have significant flies in their ointments.
A similar situation exists if we look at which industries grew the most in Lafayette since 2014.
The financial and insurance sector has grown 62.8% since 2014 in Lafayette compared to 51.2% nationally. But that industry flatlined from 2020 to 2021 at 1.2%, versus the U.S. average of 9.1%.
Utilities grew 35.2% locally compared to 26.8% nationally over the past seven years, but last year Lafayette’s grew only 3.3% compared to 12% nationally.
Even the healthcare sector, a foundational part of our economy, has slowed. Since 2014 it grew 34.7%, almost keeping pace with the national average of 37.1%. But over the last year it increased only 3.4% compared to 7.4% across the US.
Lafayette’s economy is better but still facing uncertainty
What I see is an economy not in free fall, but one that doesn’t have a clear path to sustainable growth and prosperity.
That doesn’t mean the sky is falling. But it also doesn’t mean that we can sit back, do nothing, and assume that our economic glory days will return.
Lafayette’s economy faces uncharted waters at the moment. With serious risk that water will slowly leak into the boat. And that risk becomes even more serious if we struggle to retain and attract talent, a legitimate concern, according to recent polling.
Recovering any ground we’ve lost since 2014 is a good thing, but I don’t think we can afford to assume that means everything’s going in the right direction.
To avoid a rut, we need to reignite the entrepreneurial spirit that runs through our community’s veins. We absolutely cannot afford to settle for good enough.