New Orleans stays No. 1 in recovery; BR mid-pack
New Orleans continued to fare better than any other metro area in the U.S. in recovering from the recession during the third quarter of 2012, according to a report released Wednesday by the Brookings Institute. That same report put Baton Rouge in the middle of the pack in terms of the comeback, coming in 52nd out of the 100 largest cities.
This is the third quarter in a row New Orleans was the top-performing metro area in the Brookings MetroMonitor report, which measures factors such as unemployment, home prices and output, measured against a city’s lowest economic point.
Unlike most other U.S. metros, which bottomed out during the recession in 2009, the low point for the Crescent City economy came after Hurricane Katrina in 2005. The massive ongoing hurricane recovery and rebuilding efforts provided a boost to the city during the national recession.
But Michael Hecht, president and chief executive officer of GNO Inc., said New Orleans has taken proactive steps to improve its business climate. He said the Crescent City has shaken off its reputation for political corruption and worked to reform its public school system. The Wall Street Journal recently said New Orleans was the nation’s most improved metro area, Hecht said.
“The real test for the region and the state will be in two or three years when we reach the 10th anniversary of Katrina and the rest of the country is out of the recession,” he said. “Will Louisiana and New Orleans have the critical mass to continue to outperform the rest of the country then?”
Hecht said New Orleans is well-positioned to continue to experience good economic times going forward. The city has historically been a hub for the oil and gas industry and the easy access to an ample supply of cheap natural gas should ensure a bright future for the energy sector. And Hecht said New Orleans is experiencing a boom in the digital media industry, because of the good incentives offered by the state.
“Energy and digital media should keep all of Louisiana well placed for the next decade,” he said.
Baton Rouge is holding fairly steady in its recovery, as the continued loss of state government jobs is offset by employment increases in the chemical and industrial construction industries. Low natural gas prices are stimulating that growth.
Adam Knapp, president and CEO of the Baton Rouge Area Chamber, said that Baton Rouge continues to outperform other cities in terms of unemployment and home prices.
According to Brookings, the Capital Region ranked eighth in the country in terms of the local housing price index coming back from the low point of the recession.
“So much of the damage of the national recession was in lost wealth from the decline in home prices,” Knapp said. “We’re a much better performer than the national norm.”
BRAC has a bullish outlook for the next two years. The organization is forecasting 1.5 percent growth in 2013 and 1.6 growth in 2014.
“We see ourselves in a really good place,” Knapp said.
The Metropolitan Policy Program at Brookings said in a statement that metro areas are seeing a steady recovery, albeit a slow one. Unemployment continues to drop, home prices are recovering and growth in gross domestic product — a measure of all goods and services produced — remains strong.
Metro areas that depend upon energy or high-tech fared the best, with San Jose; Phoenix; Portland, Ore.; and Boise, Idaho, making up the top five.
The weakest-performing cities tended to be in the Northeast or depend upon significant public sector employment, such as Harrisburg, Pa.; Philadelphia; Little Rock, Ark.; Syracuse, N.Y.; and Albany, N.Y.