Over a month ago, I went on KPEL to make the case that the Lafayette Economic Development Authority and the Lafayette Public Trust Financing Authority should use the $30 million they have in combined cash to rebuild the Buchanan Street parking garage — currently set for redevelopment — instead of using public money to build new office space for the […]
Lafayette’s real estate market is ice cold, and it may get worse before it gets better.
The gist: Recent employment numbers from the state workforce commission show an increase in jobs in the Lafayette area. But those same numbers show continued job losses in Lafayette’s oil and gas industry. It doesn’t appear to have bottomed out yet.
2,400 is the number of jobs added in June 2019. The biggest gainer was Leisure and Hospitality jobs — the service industry, essentially — which added 1,100 jobs. Education and Health Services added 500, the next biggest growth sector.
200 is the number of jobs lost in Mining and Logging, the segment that accounts for the oil industry. Construction took the most losses with a reduction of 300.
Roughly 12,000 mining jobs have been lost since 2014 — a 50% decline. That means Lafayette has lost more than 10,000 oil and gas jobs in the last five years. The oil and gas industry used to directly account for 10.6% of all jobs in Lafayette, but now that total is down to 6.6%.
The national oil and gas industry is growing while Lafayette’s is shrinking. While nationally the industry still hasn’t recovered all the jobs lost during the crash, oil and gas employment nationally has increased every year since 2016. Even though the losses have slowed, Lafayette’s oil and gas industry has shrunk every year since 2014.
Jobs are growing in Lafayette, but employees are making less money. High paying oil and gas jobs are often replaced by lower paying jobs in restaurants, hotels and schools — exactly where recent growth sectors are. Per capita personal income in Lafayette Parish has fallen from approximately $51,000 in 2014 to under $46,000 in 2017. During that same period, per capita personal income in the state rose from $41,811 to $43,660.
Why this matters: Clearly, Lafayette’s oil and gas industry hasn’t hit bottom. Just because the crash has slowed doesn’t mean it’s over. What we’re seeing is further evidence of the establishment of a new normal, not just a downturn based on temporary market conditions.
When the Buchanan Street parking garage was condemned last October, it caused a series of problems Downtown. There have been complaints on social media of courthouse employees feeling unsafe walking longer distances to their cars at night, of defendants being late for trials because it takes so much time to find parking, and of businesses losing patrons who don’t have easy access to street parking now that a couple hundred extra cars are competing for spots.
The gist: Year-to-date sales in Lafayette Parish approached $5.5 billion through November 2018, according to a release from LEDA, on pace to surpass $6 billion. That puts local commerce in shouting distance of 2014’s $6.4 billion peak with a month of reports to go.
Total taxable sales in the parish were up 4.4 percent from 2017 and 5.6 percent from 2016 in that time period.
But the city’s lagging behind: The city of Lafayette performed the worst among municipalities, up only 1.4 percent, compared with 28.2 percent in Duson, 19.3 percent in Youngsville, 17.3 percent in Scott, and 9.2 percent in Carencro. Even unincorporated Lafayette Parish beat the city with a 3.7 percent uptick.
More than 70 percent of the total retail sales in the parish happen in the city of Lafayette. It’s still the region’s shopping anchor. In the city, apparel, general merchandise and building material sales are all down from last year. LEDA CEO Gregg Gothreaux says that’s in part due to belt-tightening and a correction from flood-related boosts in construction.
“The downturn forced people to curtail spending,” Gothreaux says. “Apparel is something that can easily be put off, and the sales numbers over the past four years reflect that. People focused on purchasing necessities — looking for the best bargains — or may have occasionally splurged at the hot, new store. The 2016 flood spurred a modest increase in building materials sales that has since returned to pre-flood levels.”
Up but still down: While the parish’s performance might be up from last year, sales through November were off more than $300 million from 2014. The cities of Lafayette and Broussard and the unincorporated parts of the parish are all down more than $100 million each from where they were back then.
Up and up and up: But some parts of the parish have seen a steady rise in retail sales despite the economic downturn in the parish the last few years. Youngsville‘s up about $60 million since 2014, Scott about $40 million and Carencro more than $50 million.
Duson‘s all over the place: If you compare 2018 to 2014, Duson’s down about $1 million. But if you compare it to 2013, it’s up almost $11 million. But then if you compare it to 2012, it’s down more than $24 million. What’s going on in Duson?
More sales = more revenue for government, but in a good way: When total taxable sales go up, so too do sales tax revenues for schools, city governments, and economic development districts. That means more money for government without having to raise taxes. Modest increases in sales tax receipts in the unincorporated area helped patch a temporary budget hole when a plan to sell a parish-owned parking garage to the city fell through. Unincorporated Lafayette parish has been routinely raided of its sales tax revenue through annexations by nearby towns and cities.
Good news, but … Rising retail sales is an indisputably good thing. But Lafayette still has a ways to grow to recover lost ground. So while we celebrate finally getting some good economic news, let’s not forget that this just suggests the bleeding has stopped. There is still a lot of healing left to do.
At a job fair tomorrow at South Louisiana Community College IBM will try to recruit people to move from Lafayette to Baton Rouge with the help with LED.
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