How COVID-19 Affected Louisiana’s Economy

By Samuel Stebbins

Acadia Parish Today

The U.S. economy reported its worst quarterly decline in modern history during the COVID-19 pandemic, with gross domestic product shrinking at an annual rate of 31.4% in the second quarter.

The economy bounced back in the third quarter, but efforts to contain the virus’s spread throughout 2020 still resulted in a 3.5% annual economic contraction in the United States.

Arriving on the heels of a historic period of growth, COVID-19 brought about a decline in gross domestic product in every state in the country. However, no two state economies are alike, and partially as a result, some states were hit far harder than others.

Agriculture and utilities are the only two industries that expanded in Louisiana in 2020.

That year, the state’s GDP fell by 5.5%, from $240.0 billion in 2019 to $226.8 billion in 2020.

While arts, entertainment, recreation, accommodation, and food services was the fastest shrinking industry in the state in 2020, contracting by 23.9%, resource extraction was a larger detriment to overall GDP growth.

Louisiana is one of the 10 largest oil-producing states, and due largely to falling petroleum demand and reduced oil prices during the pandemic, oil production in the state hit its lowest level in over six decades in 2020. Partially as a result, resource extraction presented a 1.0 percentage point drag on GDP in Louisiana last year.

States are ranked based on the percentage change in real GDP from 2019 to 2020. Data on GDP and industry-specific real GDP came from the BEA. Data on average annual employment and the seasonally adjusted monthly unemployment rate each came from the Bureau of Labor Statistics.