[StBernard] LRA Releases Updated Report on Katrina, Rita Impact on Louisiana Businesses

[Westley Annis]

LRA Releases Updated Report on Katrina, Rita Impact on Louisiana Businesses


BATON ROUGE, La. (August 17, 2007) - Today, the Louisiana Recovery Authority (LRA) released an updated report that examines the impact Hurricanes Katrina and Rita had on Louisiana businesses during the 3rd and 4th quarter of 2006 (hereafter referred to as 2006Q3 and 2006Q4 respectively). 

The updated study, which was conducted by Louisiana State University (LSU) researchers on behalf of the LRA, Louisiana Economic Development (LED) and Louisiana Department of Labor (LDOL), revealed the state had 892 (or 0.9%) fewer employers by 2006Q4 than before the Hurricanes. This represents a significant recovery from an initial loss of 5,192 employers immediately following the Hurricanes and also shows progress over 2006Q3. 

The study, known as the updated Louisiana Business Recovery Report, also revealed that the state as a whole had an overall business failure rate of 20.87% from 2005Q2 to 2006Q4, while the Southeast and Southwest regions had failure rates of 28.31% and 18.63% respectively. 

"Although this report shows some positive signs in terms of businesses returning statewide, it also clearly indicates that there have been and continue to be serious losses in our business community," said Andy Kopplin Executive Director of the LRA. "In particular, Cameron, Orleans and St. Bernard parishes continue to remain well below their pre-hurricane level of employers even 16 months after the disasters. Increases in the construction industry can mask losses in other key industries, particularly in the service sectors, that rely on a viable infrastructure, solid population base and access to a qualified workforce. The bottom line is that this report confirms our work on the ground which shows us that many businesses in the most devastated areas are still struggling to recover, and they continue to need our help."

Other key findings include the following:

Southeast Region

*	The five parishes that compose the Southeast region had 2,591 fewer open employers (9.3%) in 2006Q4 than before the storms. However, the net gain of 1,364 (5.7%) in quarter 4 was the largest since the Hurricanes and represents concrete evidence of the recovery.
*	Orleans Parish lost 1,983 of its employers (20.7%). This was the largest post-Hurricane loss in the state, but with a net gain of 618 employers Orleans also showed the fastest fourth quarter gain of any Parish.
*	St. Bernard Parish had the largest decline in percentage terms - a 50% loss. The fourth quarter net gain of 14 employers was also smaller, both in numerical and percentage terms, than Orleans parish and the region.
*	Unlike the other parishes in the region, St. Tammany Parish showed an increase in the number of firms with a net gain of 371 employers (7.3%).

Southwest Region

*	The Southwest region was within 0.4% (22 employers) of its pre-storm employer level by 2006Q4.
*	Cameron Parish was the most affected in the region, losing 22.5% of employers as of 2006Q4.

Business Size and Sectors

*	Small businesses experienced the highest failure rates. Through 2006Q4, 25.3% of employers in the state that had 1-5 employees in 2005Q2 failed while only 16.3% of those with more than 50 employees failed. 

Click here to download the full report. 
<http://www.bus.lsu.edu/centers/ded/PPRL%20report_2006Q2_FINAL.pdf> 

The report, which was prepared by LSU's E.J. Ourso College of Business- Division of Economic Development, examines the impact of Hurricanes Katrina and Rita on the number of firms, employment, and wages in Louisiana. The results consist of comparisons of Quarterly Census of Employment and Wages (QCEW) data from the third quarter of 2005 through the fourth 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. 

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. 

Through the LRA's Business recovery Grant and Loan program, more than $100 million in grants and about $38 million in zero-interest loans are being awarded to small business owners impacted by the hurricanes. The program, managed by Louisiana Economic Development, is intended to give small businesses a fighting chance in a post-hurricane marketplace. LED awarded the first round of grants this spring, with the second round set to begin later this summer. 

Of the more than 3,500 businesses receiving grants in the first round: 

*	The average award was $18,100
*	More than 85 percent have 10 or fewer employees 
*	85 percent were located in the most devastated parishes of Cameron, Orleans, Plaquemines, St. Bernard, and 
*	53 percent were woman- or minority-owned firms 

For additional information about Louisiana's economic recovery, or to download a complete copy of the updated Louisiana Business Recovery Report, visit www.lra.louisiana.gov <http://www.lra.louisiana.gov> . 

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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