Louisiana earns top ranking among states for "economic momentum"ising personal incomes and a robust energy sector have combined to make Louisiana the top state for "economic momentum," according to a new report that tracks economic conditions in every state.
The ranking by State Policy Reports, a Washington, D.C., newsletter affiliated with the National Governors Association and the National Conference of State Legislatures, marks the first time in at least a decade that Louisiana has topped the "index of state economic momentum."
It's also the latest indicator that Louisiana has thus far been less affected by the ongoing national recession that has left many states with double-digit unemployment rates and plummeting home values.
But Marcia Howard, the editor of the report, said the state's ranking could prove fleeting and be at least somewhat inflated by the influx of hurricane-recovery dollars into the state since the 2005 and 2008 hurricanes.
"It's not that Louisiana is going gangbusters. It's just that it's the least weak right now and that could easily change," Howard said.
But Louisiana's top economic development official said the ranking is at least partially due to aggressive efforts to retain existing companies and recruit new ones.
"Overall this ranking is in line with our perspective about Louisiana's economy since the beginning of the national recession: By any reasonable measure, Louisiana's economy has outperformed the South and the nation since the recession began," Louisiana Economic Development Secretary Stephen Moret wrote in response to e-mailed questions.
The index is determined by measuring personal income, employment and population growth in each state and comparing it to the previous year.
At a time when many states are experiencing aftershocks from the financial crisis and the housing bubble that helped cause it, the states with the most economic momentum are those that derive much of their wealth from natural resources such as coal, oil and natural gas.
West Virginia, which ranks highest for personal income growth (Louisiana ranks fifth), is largely dependent on coal, while North Dakota, which is ranked second overall, has an economy dominated by oil and agriculture. The other two states in the top five -- Oklahoma and Texas -- also have oil-dependent economies.
Many of the states at the bottom of the list, such as Nevada and Florida, have been hard hit by the housing bust that have seen real estate values drop sharply from their 2007 peaks.
Louisiana ranked 49th nationally as recently as December 2007, 25th last December and sixth in the previous ranking, which came out in March.
Moret said Louisiana's economy has benefited from not having a strong durable-goods and financial sector, since those have been particularly hard hit by the current recession. But he said the state's economy could take a hit in the coming months from a decline in industrial construction jobs, as several large projects are almost finished.
"And many of our manufacturing facilities are still struggling with relatively weak national demand for their products -- so even though the national economy appears to be hitting a floor and about to head back up, we're not out of the woods yet," Moret wrote.
'Louisiana earns top ranking.' Jan Moller, Times Picayune