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The Louisiana State Capitol stands tall under blue skies in March. The state's recovery from a coronavirus-induced recession — worsened by low oil prices — might linger until the end of 2021, which is slower than the national average, a report forecasts.

Louisiana's recovery from a coronavirus-induced recession — worsened by low oil prices — might linger until the end of 2021, which is slower than the national average.

A research report conducted by the University of Louisiana at Lafayette ran economic forecasting models through an optimistic, pessimistic and likely baseline scenario for second-quarter economic activity in the state. 

Even the most optimistic economic conditions won't bring statewide unemployment below 10% until the end of 2021, the report said.

The state economy is not expected to bounce back this fall either, even if festivals and events resume. 

"You won't see the economy in October looking exactly like January," said Gary Wagner, professor of economics at the University of Louisiana at Lafayette. "It was very sobering to put these numbers together. The economic recovery is going to be a challenge. This is going to be a very difficult time." 

Employment growth going into the recession was already weak in Louisiana and had been negative since third-quarter 2019.

More than 600,000 people in Louisiana filed for unemployment between March 21 and May 9. The April state unemployment rate might exceed 30%, according to the forecast. Statewide unemployment during the second quarter, which includes April, May and June, is expected to average 18%. 

In the Baton Rouge metro area, about 415,300 people were employed before the coronavirus pandemic. That's dropped to about 351,100 workers. By 2021, the likely baseline scenario estimates 373,700 workers employed in Baton Rouge, still below pre-coronavirus levels. 

In the New Orleans metro area, about 586,100 were employed before the downturn, and only about 500,100 now. By the end of 2021, that is expected to grow to 544,400 workers. 

New Orleans and Baton Rouge may fare better than the rest of the state, especially since their economies are less exposed to the oil and gas industry than Houma and Lafayette. 

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"Those two metro areas (Baton Rouge and New Orleans) were the fastest growing before this happened," Wagner said, "but certainly the recovery in tourism could be a drag for New Orleans and they are going to recover slower than the rest of the nation." 

In the Lafayette metro area, there were about 203,000 workers in the region pre-coronavirus, which dropped to 159,200 in recent weeks. By the end of 2021, only 163,100 workers are projected. 

In Houma and Alexandria, fewer workers are expected to be on the job by the end of 2021 than after the downturn began, whereas the rest of the state's metro areas might see slight gains. 

The gross domestic product in Louisiana is expected to drop by 20.5% during second-quarter this year compared to last year. That's somewhat better than the national average, which expects a 32.2% drop in GDP. But the recovery is expected to take longer in Louisiana than the rest of nation, and GDP may not rebound to levels seen before the coronavirus until at least 2022, the report said.

That's because GDP in Louisiana is buoyed by petrochemical production and manufacturing. 

In a more pessimistic scenario where oil prices remain below $35 per barrel and there's a second wave of stay-at-home orders, state GDP might sink to levels not seen since the Great Recession in 2008 and 2009. 

Even if there's not another stay-at-home order in Louisiana, if other states keep restrictions in place there's a trickle down effect.

"We're dependent on what happens in other states and other countries. If you were to see another uptick (of the coronavirus pandemic) globally that could have a significant impact on Louisiana's economy," Wagner said. "With oil and gas, if some other countries' economies aren't open, they aren't using energy."

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