First Union economist Mark Vitner said oil and gas exploration activity through the first six months of 1997 ran more than 8 percent ahead of pace over the same period a year ago.
"Louisiana's economy has shown very impressive strength over the last year," Vitner said. "While the pickup in oil and gas exploration certainly has been a major factor in that success, other sectors also have performed well and contributed to the overall growth."
Vitner, in New Orleans Monday for a presentation to the National Association of Business Economists, said other growth sectors include tourism, international trade, financial services and manufacturing.
The tourist sector added 7,600 jobs over the past year, as tourist-related expenditures grew nearly 6 percent. Output in the state's important wholesale trade and distribution sector climbed 5.1 percent from a year ago -- reflecting the continued b flow of goods through Louisiana's major ports.
Louisiana-based manufacturers were not b contributors to the trade increase, even though manufacturing activity continues to rise. Manufacturing production, excluding chemicals and petroleum refining, climbed 5.1 percent over the past year. Ship building and repair work also increased, with output at Louisiana shipyards jumping nearly 12 percent. In addition, production of capital goods, such as communications equipment, machine tools and computer-related products, rose 8.5 percent.
The revival in Louisiana's traditional industries has lifted job growth, Vitner said. Last year, non-farm payrolls grew 2.4 percent, as businesses created nearly 43,000 new jobs. The state's unemployment rate moved lower but still remains more than 1.5 percentage points above the nation's jobless rate.
"The improving employment picture is helping stem the outflow of Louisiana residents to other states," Vitner said. "This year, the state is expected to post a slight gain in net migration, marking the first increase in more than a decade."
With the population growing again, construction activity has picked up. Louisiana homebuilders started construction on 12,900 new homes last year - the greatest number since 1984. About one-third of that total was in the New Orleans metropolitan area, which saw single-family housing starts jump 12.5 percent. Construction also increased solidly in Baton Rouge, Lafayette and Shreveport, with single-family starts climbing 25.6 percent, 18.6 percent and 7.5 percent, respectively.
Construction crews also are busy in the commercial sector. Nonresidential construction surged nearly 30 percent last year on the strength of increased shopping center and office development. Vacancy rates have dropped to the low teens in suburban New Orleans and Baton Rouge but remain higher in the central business districts.
The outlook for Louisiana remains upbeat, Vitner said. The state's economy should continue to modestly exceed the nation's, with output rising close to the 3.5 percent annual rate through the remainder of the year. Job growth is expected to increase to 2.5 percent this year, resulting in 45,000 net new jobs. Louisiana's two largest metropolitan areas will account for about half of that increase, with New Orleans picking up just over 10,000 jobs and Baton Rouge adding more than 14,000 jobs.
Charlotte-based First Union Corp. provides financial services and products to customers throughout the East Coast and nation. First Union is the nation's sixth-largest bank holding company with assets of $143 billion as of June 30, 1997.
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