While some are celebrating low prices at the pump, here in Acadiana we are coming to grips with a global energy industry that has eliminated more than $100 billion in spending since June 2014. It’s easy for that to be overwhelming. It is also hard to translate what a global phenomenon means for the local economy.
Through the Economic Performance Index, LEDA identifies changes in the economy and quantifies the impact in an easy-to-understand format. The index combines 16 individual local economic indicators into one comprehensive score. The index is an objective view of the economy as a whole, not just a piece of the economy.
The March 2016 EPI is 99.3, down 11.6 percent compared to March 2015. To put things in perspective, one year during the national recession the EPI dropped 13.5 percent. Looking at the bigger picture, the EPI has declined a total of 16.5 percent since its peak of 118.9 in September 2014. Currently, the EPI has been lower than the 12-month moving average for 15 consecutive months, meaning the economy’s downward trend has built up significant momentum.
Lafayette-area average weekly wages is one of the indicators tracked by the EPI because wages account for a substantial part of income and are closely linked to the economic cycle. An economy that is dependent upon consumer spending can’t remain strong if wages aren’t growing. Wages are not headline news like layoffs or job reports. However, it’s important to shed light on a silent shift happening in our community. Accepting a pay cut to keep a job or taking a job with lower wages just to be able to pay bills has become a reality for some in Acadiana. In the four years prior to the downturn, average weekly wages in Lafayette increased by almost $200. For the first time since the national recession, we’ve seen weekly pay decline as a result of a depressed energy industry.
Our resiliency as a community is our greatest asset. We’ve learned from our past and made the community stronger and better than before. We’ve learned the success of Lafayette relies on more than one industry. Diversification has it benefits, and it has softened the blow during this downturn. Retail sales, home prices, job losses and our overall economic dependence on the energy sector are all in a better position now than in the 1980s.
I gave a speech a few months after I moved to Lafayette in 1986 where I said I’d rather be right here, right now, than any other place at any other time. Today, I repeat that. There is no place I’d rather be. Why is that? Because the community’s team — LEDA, LCG, One Acadiana, AEDC, UL Lafayette, SLCC, and countless other public, private and non-profit organizations — is working together to make Lafayette and Acadiana a community where businesses want to locate and grow and where people want to live.
We still have much to celebrate. I’ll touch upon several business development wins and community-wide initiatives and take a closer look at the EPI during the State of the Economy presentation on June 16.
Gregg Gothreaux is president and CEO of the Lafayette Economic Development Authority.