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UL economic forecast details sharp decline in activity for first half of 2020 due to COVID-19

Forecast predicts economic activity to pick up in the second-half of the year.
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Posted at 4:09 PM, Aug 19, 2020
and last updated 2020-08-19 17:16:59-04

LAFAYETTE, La. — The University of Louisiana at Lafayette’s College of Business has released its quarterly Louisiana Economic Activity Forecast that shows how sharply economic activity declined in the first-half of 2020 due to the COVID-19 pandemic.

The forecast states that economic activity is expected to pick up in the second-half of the year. However, the pace of recovery in Louisiana is projected to be slower than that of the nation.

The report is compiled by Gary Wagner, Acadiana Business Economist with UL Lafayette, and shows that the state’s economy contracted at an annualized rate of 6.6% in the first quarter of the year as the national economy entered its first official recession since 2008.

According to the forecast, the state lost more than 218,000 jobs as the unemployment rate increased to 13% between the first and second quarters of 2020. Consumer spending and job openings in Louisiana also remain well-below historical norms.

By the end of 2020, baseline projections point to the state’s economy being 7.3% smaller than it was at the end of 2019, the report states.

But compared to its 2020:Q2 forecast, the outlook for state tax collections and home prices have improved. The forecast projects a 2.2% increase in home prices between the final quarter of 2019 and the final quarter of 2020.

Every metropolitan statistical area is also expected to experience positive job growth in the second-half of 2020. However, this job growth is not expected to be robust enough to offset the losses from the first-half of the year.

Baton Rouge, Lake Charles, and the New Orleans metro areas all experienced Q1-Q2 job losses in excess of 10%. The Baton Rouge region is projected to experience the strongest job growth in the state in the coming quarters.

You can read the full forecast below.

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