Tracking The Economic Impact of COVID-19

One of our commitments to the New Orleans community has been to provide unbiased, objective economic development information to help inform public policy and to ensure that businesses, job candidates, and stakeholders are equipped with our best information to ensure that New Orleans becomes the most attractive city of its size for financial and human capital investment. COVID-19 has only underscored the fierce urgency of this enduring commitment.

To shed light on the current economic crisis and forecast ways to combat its effects, The New Orleans Business Alliance is piloting a new dashboard, to be updated monthly, focused on data which identifies tension points related to revenue and industry growth in New Orleans’ top six industries – accommodation and food services; mining, quarrying, and oil and gas extraction; retail trade; professional, scientific, and technical services; real estate, rental. and leasing; and wholesale trade. 

The impact outlined in the dashboard is derived from the recent Deloitte report which points to an 8.3% dip in GDP for 2020, as well as the Opportunity Insights’ Economic Tracker which highlights a drastic reduction in consumer spending. Navigating out of the recession is a key focus, and this analysis may be used to acquire potential strategic gains as the global economy shifts and reorders itself in light of COVID-19.

Total Unemployment Claims: Examining total unemployment insurance (UI) claims in New Orleans, in the 30 days prior to the Phase I Reopening, the city averaged 46.6K total UI Claims. Since reopening, total UI Claims have averaged 44K. 

Forecast Lost Tax Revenue: These six industries account for 80% of local tax revenue. Based on current contraction, it is forecast that these industries will see an estimated $81.2MM reduction in city tax revenue due to the pandemic.

Industry Job Loss: Due to COVID-19, the data shows that Accommodation and Food Services suffered a loss of roughly 25K jobs. An additional 12K jobs were lost across the other top five industries.

Consumer Spending: Consumer spending accounts for a significant portion of GDP (70% of national GDP in 2019).  In the New Orleans metro area, as of July 12, 2020, Arts, Entertainment, and Recreation spending by all consumers decreased by 55.8% compared to January 2020.  Additionally, Restaurant and Hotel spending by all consumers decreased by 33%.

In comparison, nationally, consumer spending across the Entertainment and Recreation Industry decreased by 47.6%. In the Restaurant and Hotel Industry, consumer spending decreased by 31.9%.

Job Postings Decrease: Across all six focus industries, job postings decreased drastically between June and July in 2019 vs. 2020. Accommodation and Food Services’ job postings dropped significantly due to the pandemic. Professional, Scientific, and Technical Services postings took a drastic decline as well.  

A few considerations while reviewing this dashboard: 

• The purpose of this tool is not data analysis, but data accessibility for forecasting the impact of COVID-19. 

• This dashboard is a work in progress focused on providing time-sensitive data in an accessible format, NOLABA intends to update data and validate it as we learn more about the economic impact of COVID-19. 

• Publicly accessible data has a lag time, meaning that the effects of COVID-19 may not show in many of the economic data sets traditionally tracked. It may take several months to fully understand the scale of the impact. As a result, we used job postings data to show time-proximate impacts on the New Orleans labor market.

Lastly, we want to acknowledge the efforts of our AVP, Data Analytics and Performance Management, Omar Stanton, in leading this effort. While not scholarly reviewed, we appreciate the input of Joe M. Ricks, Jr., PhD (Xavier University of Louisiana) and Robert Habans, PhD (The Data Center) in helping to refine this first edition.

Sources:
https://www2.deloitte.com/us/en/insights/economy/us-economic-forecast/united-states-outlook-analysis.html
https://tracktherecovery.org/
https://opportunityinsights.org/wp-content/uploads/2020/05/tracker_paper.pdf
EMSI, Q2, 2020 Data Set:  Emsi Job Postings (Louisiana Department of Labor)
Louisiana Workforce Commission