A new study that analyzed the economic impact of private construction on state economies found that Louisiana ranked second overall in terms of how much the industry contributes to the gross domestic product.
According to the report released Tuesday by Associated Builders & Contractors Inc., a national trade organization, private construction accounted for 5.8 percent of all economic activity in Louisiana during 2014. Only North Dakota, where construction contributed 5.9 percent to the state GDP, ranked higher.
Construction accounted for 3.7 percent of the U.S. gross domestic product in 2014.
Louisiana’s figures were boosted by the boom in petrochemical construction, caused by low natural gas prices, activity in the energy sector and building for the tourism industry in New Orleans, said Bernard Markstein, an economist who analyzes the impact of construction for the ABC.
“Louisiana is a highly desirable location for those types of energy-intensive industries,” he said.
The states that fared the best in the report either are heavily dependent on the energy industry, such as North Dakota, or the tourism industry, such as Hawaii which was tied for third with a 5.3 percent GDP contribution from construction, or both energy and tourism, like Louisiana, Montana, which was tied with Hawaii, and Utah, which ranked fifth.
Despite low oil prices, Markstein said the forecast for private construction in Louisiana looks good for 2015. Manufacturers like the low energy prices and the U.S. economy is continuing to improve. The possibility of higher interest rates could impact the forecast, he said.
“Things look good for Louisiana going forward,” Markstein said.
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