While gasoline at the pump is costing a little more as the spring and summer approach, the impact of low oil prices is still being felt in Louisiana and likely will be for a while.
The key measure of nonfarm employment declined by 15,400 jobs in January from a year earlier — the sixth consecutive month with a loss from the previous year, the Louisiana Workforce Commission reported Monday.
Statewide, private-sector employers lost 13,200 jobs this January when compared with January 2015. The mining and logging sector, which primarily includes the struggling oil and gas industry, was responsible for most of the losses, showing 12,100 fewer jobs than in January 2015, figures adjusted for seasonal factors show.
It’s no surprise for the staff at the Workforce Commission. “The benchmarked data show that the decline in oil prices has had tremendous effects on the employment situation in our state,” said Ava Dejoie, executive director of the commission. “Job losses in oil-dependent (areas) and in secondary job sectors are a concern.”
She is right. As the commission staff worked over the data, they also found that seasonally adjusted figures for 2015 show Louisiana lost more jobs than earlier estimated.
The state lost 18,200 jobs from January 2015 through December 2015, which is 8,200 more than previously reported. However, the average total of jobs for the year was 1,989,600, which is 2,900 more jobs than earlier estimates.
There is a bit of a “tale of two cities” nature to Louisiana’s predicament.
The impact of layoffs and other cutbacks in the oil patch is seriously hurting tax collections, both for the state and particularly for local governments. In Lafayette, sales tax collections were down again in January. The monthslong series of declining reports shows the impact of oil prices on the Acadiana economy.
While that is a barometer of retail activity, the sales tax also is a cost to businesses using materials in building or producing things. It is formally a “sales and use tax,” so that businesses will also pay sales tax — particularly after April 1, when a new sales tax will be collected by the state to help fill Louisiana’s overall budget hole.
At the same time that the oil patch is hurting, Louisiana continues to see significant long-term investments in the oil and gas industry, in the refining and petrochemical manufacturing side rather than the producing side.
State and local officials cheered when an investment of more than $700 million at Geismar was announced by Shell. Because industrial facilities are so heavily automated, projects like the Geismar expansion won’t completely make up the loss of oil production jobs, but the industrial construction jobs are welcome additions to the payrolls in the capital’s regional economy.
In the Lake Charles area, it’s still a time of a boom, as the Calcasieu River petrochemical complex expands.
Many regions of the country would hold parades and festivals to celebrate industrial development “wins” of the level that we’re rather blase about in Louisiana.
Still, oil and gas production remains one of the keys to our state’s overall economic health, and it’s not doing well at the moment.