Market Update: Louisiana economy up, but lags behind national trends | Business – Full Analysis

The Louisiana economy is moving in the right direction post-pandemic, an economist says, but the state still struggles to match national economic growth.

State employment surpassed 2 million in May, exceeding pre-pandemic levels, and continues to grow, but did not rebound as quickly as national employment levels, Stephen Barnes, an associate professor of economics at the University of Louisiana at Lafayette said. Barnes presented an economic outlook presentation at the Rotary Club of Baton Rouge on Wednesday afternoon.

He attributes the state’s struggle to meet national employment growth to pandemic setbacks, when Louisiana was hit particularly hard in tourism, oil and gas.

“It’s been on a path of faster growth,” he said of the national economy. “So good that Louisiana is moving in the right direction but concerning that we’re still struggling.”

The state is taking the right steps toward economic development, with major projects on the docket like the Meta data center in Richland Parish, but large investments are not new to the state, he said. The missing piece to meeting the pace of national economic growth is investing in public initiatives, pointing to the restoration of the LSU lakes as an example.

Barnes said the state can invest further in public education to assure residents that Louisiana is a place they can raise a family.

“We’re missing the final stretch of the sales pitch for Louisiana,” Barnes said. “We need to be a little bit more intentional about investing in making our cities and communities the places that people want to know, because people have a lot of freedom and choice now.”

While employment lags, other economic indicators like personal income have fared better, with state personal income levels trending higher than the consumer price index since December 2022, according to U.S. Bureau of Labor Statistics and U.S. Bureau of Economic Analysis data.

“The good news is incomes have actually been growing a little bit faster than inflation,” he said. “So as much as we still might be concerned about inflation, generally speaking, there’s still money coming into the economy that can help kind of keep things moving forward.”

2026 forecast

In the first half of 2026, real GDP is expected to grow by 2% and by 1.9% in the latter half of the year, according to the Federal Reserve Bank of Philadelphia’s Livingston Survey. The survey estimates that the inflation rate will fall to 2.8% in 2026 and 2.4% in 2027, still above the 2% benchmark set by the Federal Reserve Bank.

The survey notes that the 2026 outlook was computed with some economic data either delayed or missing due to the government shutdown in fall 2025.

Barnes is keeping an eye on future exchange rates, which are impactful to the Louisiana economy due to the state’s numerous petrochemical plants. The oil and chemical industries are sensitive to changes in the global market, he said.

He serves as the independent economist on the Louisiana Revenue Estimating Conference, which other members consist of Gov. Jeff Landry, Louisiana Senate President Cameron Henry, R-Metairie, and state House Speaker Phillip DeVillier, R-Eunice. The group computes an estimate for the state general fund for the following year.

He said he expects the state revenues to slightly decrease and remain flat in 2026.

“It’s good, but it’s not amazing,” he said.