[StBernard] Comprehensive New Study Examines Impact of Katrina and Rita on Louisiana Businesses

[Westley Annis]

Comprehensive New Study Examines Impact of Katrina and Rita on Louisiana Businesses

Report Benchmarking Recovery from Pre-Hurricane Levels Shows Devastation, First Indication of Rebound 


BATON ROUGE, La. (March 8, 2006) - A comprehensive new report that examines the impact of Hurricanes Katrina and Rita on Louisiana businesses shows the first indication of business rebound from the first and third most catastrophic disasters in American history. The groundbreaking report also confirms the tremendous devastation businesses suffered as a result of the storms, particularly in the parishes of St. Bernard, Orleans and Cameron. 

Known as the Louisiana Business Recovery Report, the report shows that the number of businesses open across the entire state declined immediately after the storms and continued to decline through the first quarter of 2006. There was a slight increase in the second quarter of 2006; however, at the end of the second quarter 2006, there were still 2,270 fewer firms open than before the storms. 

"This report confirms what we've heard anecdotally from employers and business owners across the state," said Matt Stuller, Chair of the LRA's Economic and Workforce Development Committee. "The back-to-back storms devastated thousands of Louisiana businesses - particularly those in the retail trade and service sectors - and while some have recovered, many in the most devastated areas are still fighting for their lives and it's important that we do everything we can to support them." 

The report, which is the first of its kind, was conducted by Louisiana State University (LSU) researchers on behalf of the Louisiana Recovery Authority (LRA), Louisiana Economic Development (LED) and Louisiana Department of Labor (LDOL). 

"The data suggests that the second quarter of 2006 was a turning point for many businesses, so we think the worst is behind us," said Dek Terrell, Director of LSU's Division for Economic Development who conducted the study. "While it's encouraging that we're beginning to see small signs of business growth, we greet this news with cautious optimism. Many Louisiana businesses are not out of the woods yet, and will need continued support and assistance in order to achieve long-term stability." 

The data clearly show that the parishes most damaged by the hurricanes continue to struggle. In Orleans parish alone nearly 3,400 businesses - more than 35% of all businesses in the parish - closed in the year after the storm. Despite a modest recovery in the second quarter of 2006, the number of businesses open in Orleans remains 27% below pre-hurricane levels. 

In percentage terms, the largest net loss of employers occurred in St. Bernard parish. By the first quarter of 2006, 59.2% of the businesses in St. Bernard had closed their doors. Despite a modest recovery in the second quarter of 2006, the number of businesses open in St. Bernard remains 54% below pre-hurricane levels. This is not just the case in the Southeast. Cameron parish experienced a 28% decline in the number of employers as of the first quarter 2006.

Other key findings from the report include:

*	Overall, Southeast Louisiana (five parish region including: Jefferson, Orleans, Plaquemines, St. Bernard and St. Tammany) had 3,717 fewer employers nearly one year after the hurricanes, a 13.3% decline in the number of employers relative to the second quarter in 2005. 

*	With the exception of Cameron parish which continues to see a decline in the number of employers -- 20.8% as of the second quarter of 2006, Southwest Louisiana (three parish region including: Calcasieu, Cameron and Vermilion) had returned to within 1% of its pre-storm number of employers by the second quarter of 2006, nearly one year after the storms.

*	For individual parishes, the region and the state, the largest net loss of firms came in retail trade and service sectors, which typically rely on local population as a customer base.

*	Not surprisingly, construction emerged as the strongest sector for both the state and the region. 

The complete report, which is available online at www.lra.louisiana.gov <http://www.lra.louisiana.gov>  or by clicking here <http://lra.louisiana.gov/assets/LouisianaBusinessRecoveryReport030807final.pdf> , tracks the number of firms, employment and wages in Louisiana based on Quarterly Census of Employment and Wages (QCEW) data from the third quarter of 2005 through the second quarter of 2006. QCEW data from the second quarter of 2005, prior to the storms, is also used to benchmark pre-hurricane levels. 

Louisiana firms are required, by law, to report employment and wage data quarterly to the LDOL for the purpose of determining their unemployment insurance taxes. 

Researchers studied the change in the total number of firms by parish and industry in Louisiana to measure and analyze the number of firms could be "verified open." This report captures data for about 96 percent of companies in the state. 

The report was prepared by LSU's E.J. Ourso College of Business- Division of Economic Development. In an effort to determine the status of Louisiana employers, and track their post-hurricane recovery, research is ongoing and additional reports will be issued on a quarterly basis. The study was primarily funded by LED, through grants from the U.S. Economic Development Administration. 

In January, Governor Kathleen Blanco, Lt. Gov. Mitch Landrieu, LRA and LED launched a $138 million Business Recovery Grant & Loan Program, which is designed to help small businesses still struggling in the wake of hurricanes Katrina and Rita. By March 1, more than 5,000 applications for Louisiana Business Recovery Grants had been received, along with more than 1,000 loan applications. Applications are currently being processed. LED officials expect to announce the first grant recipients (up to $20,000 each) and the first wave of loans in late March. Loan applications can still be filed. For additional information, call 1-877-217-1777, or visit www.LouisianaForward.com <http://www.LouisianaForward.com> . 

For additional recovery information, or to download a complete copy of the Louisiana Business Recovery Report, visit www.lra.louisiana.gov <http://www.lra.louisiana.gov>  or click here <http://lra.louisiana.gov/assets/LouisianaBusinessRecoveryReport030807final.pdf> . 

Hurricanes Katrina and Rita devastated South Louisiana, claiming 1,464 lives, destroying more than 200,000 homes and 18,000 businesses. The Louisiana Recovery Authority (LRA) is the planning and coordinating body that was! created in the aftermath of these storms by Governor Kathleen Babineaux Blanco to lead one of the most extensive rebuilding efforts in the world. The LRA is a 33-member body which is coordinating across jurisdictions, supporting community recovery and resurgence, ensuring integrity and effectiveness, and planning for the recovery and rebuilding of Louisiana. 



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