Louisiana posted its second straight yearly decline in gross domestic product in 2017, putting the state last in country’s rate of economic growth.
The state’s GDP rate was minus-0.2 percent in 2017, following a minus-0.4 percent rate in 2016, according to the latest report from the Bureau of Economic Analysis.
GDP is defined as the market value of all goods and services produced, and is the among the most common measuring sticks for the U.S. economy.
The annual figures for 2017 in Louisiana came despite a better fourth quarter of 2.2 percent growth, though that still put the state slightly behind the U.S. average, 2.7 percent, and the average of other states in the Southeast, 2.9 percent.
Greg Albrecht, chief economist at the Louisiana Legislative Fiscal Office, said the figures track generally with employment and tax data, and suggest Louisiana is still feeling the lingering effects of an oil price-driven recession that has dragged the state's economy down in recent years.
The decline in GDP also suggests the state's economy is not diversified enough to weather the type of prolonged downturn seen since oil prices fell off a cliff several years ago.
"We’re not completely undiversified, but we don’t have the kind of diversification that if your oil and gas sector goes weak you can recover quickly," Albrecht said.
An oil and gas boom has exploded in the shale fields in places like Texas, where horizontal drilling technology has made onshore extraction cheaper and more lucrative than offshore drilling, traditionally a large part of Louisiana's economy.
"I think what's driving the Louisiana economy are some global factors that we have no control over, such as the price of oil," said James Richardson, an LSU economics professor. "We’re not where companies are going to put their dollars back when (oil) prices start going back up, at least initially."
Richardson said the fourth-quarter positive numbers are too small a sample size to tell if the state is trending in the right direction. But he pointed to projects like DXC Technology, a 2,000-job tech center in New Orleans coming online this year, as an example of the type of diversification the state needs to embrace.
He also warned Louisiana is "very trade sensitive," and is particularly at risk as threats of a trade war play out with other countries.
Nondurable goods manufacturing fared the worst in Louisiana, with the sector down 0.9 percent last year. Mining, quarrying and oil and gas extraction posted the largest gain, at 0.31 percent growth. Oil prices have risen, but still not to a level that lures drillers from other areas.
The U.S. as a whole grew its GDP by 2.1 percent last year, and Southeast states grew at an average clip of 2.0 percent. Florida posted the largest gain among Southeast states in the fourth quarter of 2017, while Texas had the largest growth in the country during the period.