Far more than The Great Recession, The Great Storm of August 2005 remains the defining event of recent history for the city of New Orleans and for the metro area economy. With employment totals already seriously depleted by the effects of Hurricane Katrina, the recession that followed passed with relatively minor impact. Indeed, total non-farm employment in the local Metropolitan Statistical Area (MSA) as of July 2012, indicating a return to pre-recession levels, was up 2,000 jobs (0.4%) from July 2008. (Data for August show total employment somewhat lower than four years earlier. The basic trend featuring the redemption of losses due to the recession, however, has been established.) In any case, a true recovery here would consist of a return to pre-Katrina job numbers and the rebuilding of depleted commercial and residential real estate markets. Total non-farm employment per the latest August, accordingly, remained down fully 82,500 jobs (13.6%) from the total recorded for August 2005, before the hurricane.
Growth post recession, in any case, has been sluggish. Following modest gains in 2011, job growth stalled in 2012. U.S. Bureau of Labor Statistics (BLS) data for August show a 300-job (0.1%) decline year-over-year. This essentially flat overall performance, however, conceals a mix of favorable and unfavorable trends. On one hand, the local Leisure and Hospitality sector has shown impressive gains as economic improvement at the national level has generated increasing tourist flows to the area. Employment in this sector, as of August, was up fully 4,100 jobs (5.7%) from 12 months prior and was up 7,000 jobs (9.9%) over 24. On the other hand, noted New Orleans CityBusiness in an October report, “New Orleans construction job losses could signal an end to the post-Katrina boom.” Data from the BLS show a sharp decline in employment in the immediate wake of the storm followed promptly by an even sharper upward spike. Employment in Construction per the latest August, meanwhile, was down 3,700 jobs (12.0%) from 12 months earlier.
As a significant southeastern port city, New Orleans, like other regional port cities, is attempting to position itself to compete for the greater volumes expected to result from the widening of the Panama Canal, scheduled to complete in 2015. According to port officials, as reported by CityBusiness in October, “there is still more that can be done to help [the port] take a bigger bite of the 5 million additional containers expected to come into the Gulf of Mexico by 2025. “We think we have a reasonable chance at 30% to 40% of that,” said a port executive. “That would be our goal. Quite honestly, if we got 20% of it, that would be excellent.” Additional costs of another $478 million in upgrades are expected.
Improvement is apparent in the local housing market. The $216,147 average August selling price was up 10% year-over-year, CityBusiness reported in October citing data from Gulf South Real Estate Information Network. “Steady price increases, combined with greater home sales and rising builder confidence, suggest the housing recovery may be sustainable.” Moreover, the third quarter of 2012 saw declines in foreclosures on the order of 6.16% for the quarter and 13.99% year-over-year, states this source in a separate October report citing RealtyTrac.