Lafayette fared well enough in a COVID-19 affected economy in 2021, recovering half of jobs that were lost here the previous year and creating new opportunities for large companies and small start-ups. On the whole, an expert panel at the Advocate’s Economic Outlook Summit 2022 saw brighter horizons for this year.
That’s the good news.
But the Acadiana region also weathered continuing challenges in some major income areas and faces imposing risks in the year ahead, including an uncertain coronavirus picture and the threat of continuing daunting inflation.
Panel members were Gary Wagner, Acadiana business economist/BORSF endowed chair in economics at the University of Louisiana at Lafayette; Lori McCarthy, managing broker at Latter&Blum realtors; Mandi Mitchell, CEO of Lafayette Economic Development Authority; Bryan McDonald, CEO at SchoolMint; Dr. Amanda Logue, chief medical officer at Ochsner Lafayette General; and Cory Jack, owner at Jack & Associates.
Wagner’s assessment of the 2021 economy included national job losses of some 14 percent since the end of 2019, just before the onset of the pandemic, which was twice as severe as the 2008 economic crisis.
He said Louisiana weathered the job losses slightly worse than the nation, although Acadiana fared a little better. At least part of the reason for the greater impact on the state’s economy was the bad run of disruptive hurricanes, including Laura and Delta in 2020, Ida in 2021.
“About 50 percent of jobs lost in Lafayette have been recovered,” he said. “We still have a ways to go.”
That needed progress may face economic headwinds from COVID — the United States is in its fifth surge of the pandemic — and from inflation that’s the highest in 40 years. Inflation, he said, erodes purchasing power and threatens to slow the economic churn that would enhance the recovery.
Wagner said we should expect as many as three increases in interest rates from the Federal Reserve, the first possible increase in March.
Inflation and higher interest rates may cut into home sale profits, which should be robust nonetheless. That was McCarthy’s assessment of the Acadiana market in 2022.
She said the ‘21 real estate market was an “exciting one,” — a “seller’s market” with some mortgages in the 1%-2% interest range and many more in the 2%-3% range.
“People would think about listing a house, talk to Realtor, and had offers before listing,” she said. Oftentimes, those offers were above asking price.
Interest rates were low, she said, but so was inventory. Instead of prospective buyers looking at 40 houses on the market, they might find just five in their range. That drove prices up.
Bidding wars, she said, were “crazy” — very unexpected in a pandemic year. She doesn’t expect the same sales atmosphere this year but said that so long as interest rates don’t pass the 4%-5% range, the market will be brisk and should continue to boost the economy.
Mitchell, who took the helm at LEDA about two months ago, said she’s been doing her own tour of the community, sitting with people to discuss their assessment of the area and gaining valuable insights about Lafayette.
These days, she said, Lafayette and its environs are a “location of choice for top talent and new or expanding businesses.” It’s also a welcoming place for entrepreneurs.
“Omicron reminds us of the pandemic,” she said, “but we are learning to adapt, to keep the economy going through proven measures.”
She said economist Loren Scott, LSU professor emeritus, forecasted Lafayette’s economy would recover by about 69 percent by the end of 2021. “We made 72,” she said, boosting the area to “well on its way” to recovery in 2022.
LEDA’s ’22 focus will be on addressing labor shortages and grappling with the need to encourage more people back into the economy. She said some people have dropped out of the work force but others are returning in new ways: pivoting to higher wages or remote work.
The tech industry should continue to grow in Lafayette with SchoolMint planning to move to a temporary space downtown in the Lemoine building ahead of finding a permanent home. The company has made acquisitions since announcing its move to Lafayette about 18 months ago and now employs 225 people.
“We continue growing,” MacDonald said. “We also moved in the midst of the pandemic, which made selecting real estate hard. We are in the process of finding a more permanent location. We are committed to Lafayette and are very excited about the downtown area.”
Corey, Jack, whose firm, Jack & Associates LLC, encourages and informs entrepreneurs, said he’s encountering more young people who have a taste for and some skill in building their own business — including teenagers.
“We teach young entrepreneurs,” he said. “Teens are the future, tomorrow’s business leaders. We have lots of talented people here, experts in their craft, some of whom just need business acumen.”
Some, he said, already own their own LLC’s; others have interesting business ideas.
“I see business ownersin their 20s and 30s hiring people,” Jack said. He said it is important for Lafayette to provide the infrastructure and the environment for young entrepreneurs.
Logue was good — too good — at Ochsner last year, the result of the pandemic that imperiled people’s lives and packed the emergency rooms and took up many hospital beds.
She said Ochsner had been “well on our way” to making improvements in providing high-quality, low cost health care when the pandemic hit. She said as other businesses were closing in the face of the coronavirus, hers was booming.
She said health care professionals felt “privileged” to play a vital role in treating the sick or imperiled, with COVID-19 vaccinations and treatment. She said the effort “stretched us to do things we’ve never done before.”
But it stretched the limits of many health-care providers, and the cost was felt with many providers leaving health care and seeking new ways to earn their living. A major strategy, she said, will be to provide a new pipeline for bringing new workers into the field and to keep people out of the hospital with preventive care.
“There are opportunities to offer people work in healthcare,” she said, “a ton of work that doesn’t involve touching patients.”
She said she would like to see the preventive action of masking up lose its stigma. Masking is non-invasive and easy. But, she conceded, the “taste for mandates is extremely low.”