Wednesday, December 29, 2010
In this economy, flat is not a bad word - and in some areas we're doing much better than that.
LEDA collects hundreds of data indicators including retail sales, construction valuation, per capita income and more. It is those specific tracking points, plus anecdotal information from community and business leaders, that provide LEDA with the numerical research and key valuations to present Lafayette in the best light to those businesses or individuals seeking to become a part of our community.
Wednesday, December 29, 2010
In this economy, flat is not a bad word - and in some areas we're doing much better than that.
LEDA collects hundreds of data indicators including retail sales, construction valuation, per capita income and more. It is those specific tracking points, plus anecdotal information from community and business leaders, that provide LEDA with the numerical research and key valuations to present Lafayette in the best light to those businesses or individuals seeking to become a part of our community.
As the year draws to a close, now is a good time to review several of the top economic indicators LEDA tracks to see how 2010 stacked up for the community. While we won't have year-end numbers for many of the statistics we track until 2011, we have a fairly good indication of how Lafayette and Acadiana fared this year. We had a fair to good year. Retail sales numbers have increased as the year progressed. Construction is going strong. Reported income and wages are up. Most important, the worst-case scenario impact of the offshore drilling moratorium on jobs and the energy industry did not materialize.
Lafayette has received its share of recognition from national media and organizations this year. The Milken Institute ranked Lafayette the 14th best Metro/Large City in the nation citing five-year job growth, five-year wage and salary growth, and one-year high-tech GDP growth. The Daily Beast recognized Lafayette as one of the best cities in the nation for second careers citing job availability, income levels, cost of living and charitable giving (October). In August, The Daily Beast identified Lafayette as one of 20 metropolitan areas that, since 2007, have shown positive growth in overall employment, per capita personal income and metropolitan area GDP. Lafayette was also named one of the Top 100 Places to Live (Relocate America, April) and the eighth best medium-sized city in the nation for job growth (New Geography, April).
Retail Sales
Total retail sales says a lot about the condition of the market. A rise in retail sales receipts is usually the result of an increase in effective buying income as people join or improve their position in the workplace. A decrease in retail sales could mean a lack of confidence in the economic climate or loss of disposable income. Either scenario needs immediate attention by business and government alike to prepare for and/or effect change. Retail sales aren't the end-all, be-all of statistics. A slow month could be just that. It's important to couple that information with other indicators to get the big picture.
After three years of above average growth increases in retails sales, we have returned to more stable and sustainable growth in 2009 and 2010. When 2010 began with a 14 percent deficit from 2009 many people in the community were concerned the national recession had finally hit Acadiana. However, since February, total retail sales have closed the gap each month. In September (the last month reported), sales are down only 2.8 percent. In fact, September retail sales were 6 percent higher than sales in September 2009. These steadily-increasing numbers show the resilience and diversity of the local economy even when faced with national economic woes and consequences from the drilling moratorium. Retail sales are cyclical in nature, and it's a positive sign that back to school numbers are up. With a strong holiday shopping season, we could see sales even with 2009.
Construction
Lafayette Parish's construction industry has remained active. Fiscal year 09-10 is the third highest on record for commercial and residential construction at $334 million. This significantly exceeds the $235 million forecasted for the fiscal year. It is important to note this number reflects construction permitted within the city limits of Lafayette and unincorporated areas of the parish. These numbers would be much higher if construction from Lafayette Parish's five municipalities - Broussard, Carencro, Duson, Scott and Youngsville - were included in the reporting.
Over the past seven to 10 years, three distinct sectors have seen consistent increases in construction activity - medical, hotel and multi-family housing. That trend continued this year. In FY 09-10, 52 permits valued at $80 million were issued for various medical facilities, including general medical, dentistry and chiropractic offices, in addition to hospital facilities. Since 2000, there have been 46 permits for new construction or alterations issued for hotel properties in Lafayette. After reaching a peak in FY 07-08, current numbers - two permits valued at $15.5 million - are more in line with growth seen prior to 2006. Multi-family housing has also experienced advancements in construction activity with more than 40 permits issued since 2002. In FY 09-10, permit valuations for multi-family dwellings made up nearly 30 percent of the top 35 new commercial construction projects; with a $24 million permit for a new apartment complex as the top new commercial project for the year.
Per Capita Income
Per capita income is a significant measurement of the quality of our economy. In assessing our economic growth and progress, we look to per capita income as reliable measure of our success as a community and because of its availability nationwide on a county level it is sometimes the only indicator available to adequately compare ours to other regions. As evidence of its importance, we've identified it as the most frequently requested statistic of LEDA clients. Site selectors, professionals and business entrepreneurs look to it as a snapshot of the community as a whole. The most recent figures show that Lafayette Parish's per capita income is $43,062, which is $1,500 more for each man, woman, and child than the year before. Lafayette Parish has the third highest PCI in the state and is now ranked in the top 9 percent of all counties in the U.S., with nearly twice the growth rate as the U.S. average (3.8 percent compared to 2 percent). Lafayette's per capita income remains above both the state and national figures.
The per capita income figure is a lagging indicator of the economy. Because the income statistic is historic in nature we look to it to affirm our economic progress. An indicator, such as this one, that measures affluence is important as we work to maintain a diversified economy. Without an affluent population, Lafayette could lose high-end retailers, its broad spectrum of housing options, and the variety of goods and services that Lafayette residents have grown accustomed to. PCI numbers for 2009, which will be reported next April, should hold steady as the region remained relatively unaffected by national economic issues last year. With local unemployment numbers ticking up beyond historic averages in 2010, we may see some hesitation in PCI growth reported in the next couple of years.
In total, LEDA collects hundreds of data points - monthly, quarterly, annually, and others at various points in the year. Our regional ally, Acadiana Economic Development, tracks similar data points and statistics for a seven-parish region, providing research services to the surrounding parishes. In an ideal world there would be one fact or figure that would tell us the future or how to make Lafayette a better place. Instead we're tasked with collecting many facts and figures and anecdotal information to try to accomplish our goal. These statistics and others can be found on LEDA's website at www.lafayette.org.
Gregg Gothreaux is president and chief executive officer of the Lafayette Economic Development Authority.