Lousiana GDP drop in first quarter of 2022 among worst in the country

Published 3:35 pm Saturday, July 2, 2022

(The Center Square) Louisiana’s economy slumped during the first quarter of 2022, with the state’s gross domestic product annual rate decline of 4.3% outpacing all but five states, according to the latest data from the U.S. Bureau of Economic Analysis.

Louisiana was among 46 states and the District of Columbia that witnessed a decrease in real gross domestic product during the first quarter of 2022, coming in 45th out of 50 nationwide. Louisiana’s 4.3% annualized contraction was the second biggest in the southeast, behind only West Virginia’s 6.1% decline.

Nondurable goods manufacturing was the leading contributor to Louisiana’s slowdown with a 2.29% reduction, followed by a 0.96% drop in mining, quarrying and oil and gas extraction.

Other Louisiana industries with a decline included retail trade, transportation and warehousing, finance and insurance, wholesale trade, construction, accommodation and food services and administrative and support and waste management and remediation services, according to BEA figures released Thursday.

“It’s probably hard to imagine a report that’s worse right now,” Gary Wagner, economist at the University of Louisiana at Lafayette, told NOLA. “I think there’s a 50-50 chance we’re in a recession.”

Louisiana’s 4.3% real GDP drop was nearly double neighboring Texas’ 2.3% decline, while Arkansas posted a 0.9% decrease and Mississippi declined 1.3%.

Nationwide, “real gross domestic product decreased in 46 states and the District of Columbia in the first quarter of 2022, as real GDP for the nation decreased at an annual rate of 1.6%,” the BEA reports. “The percent change in real GDP in the first quarter ranged from 1.2% in New Hampshire to -9.7% in Wyoming.”

The BEA contends the coronavirus continued to impact the economy through April, though the extent of its influence “cannot be quantified.”

“In the first quarter, an increase in COVID-19 cases related to the Omicron variant resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country. Government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households all decreased as provisions of several federal programs expired or tapered off,” according to the report.