NEW ORLEANS (WVUE) - The economic engine fueling Louisiana's job market is sputtering, and now national statistics rank the New Orleans metro area dead last in unemployment when compared to other metropolitan areas.
"The fact is that oil, which is still hanging out below $50 a barrel, has been a drag on our region and our entire state," GNO Inc. Regional Economic Development President and CEO Michael Hecht said.
According to the U.S. Department of Labor, Louisiana ranks third from the bottom with a 6.4 unemployment rate. More than a point higher than the 5.2 national average.
The statistics gathered by the federal agency reveal an even more concerning picture for the New Orleans metro area.
The region's 6.2 unemployment rate puts the area at the bottom of list when compared to other metropolitan areas with a 2010 census population greater than 1 million.
"As supply and demand start to equilibrate with oil, I think you'll see that unemployment number begin to improve," Hecht said.
Louisiana Economic Development Secretary Don Pierson believes it could take a while for the state's hot commodity to bounce back.
"The forecast I wish was better," Pierson said. "By talking to most experts, I believe you'll find the decline is going to stay with us likely through '17 and maybe not see a lot of improvement until 2018."
Improving job numbers are needed across our area,
At this time, the Hammond region's unemployment rate sits at 7.6. In the river parish's, unemployment is at 7.1. Baton Rouge's rate stands at 6.
But with the sluggish oil and gas industry pulling the economy down, the numbers could be even worse without the state's diversification efforts.
"Back in the 80s, our state was 32 percent dependent on oil and gas as a percentage of our GDP. Today we're only about 8 percent," Hecht said.
The state is investing hundreds of millions of dollars in the technologies industry, chemical industry as well as infrastructure.
Economists believe those investments will push the state's unemployment numbers down by the beginning of 2017, even as oil and gas is expected to continue to struggle.
"We'll continue to improve. We'll continue to diversify. But in the near term, there is going to be what I call, the cha-cha progress, two steps forward one step back. It's not always even but over time you get better and better," Hecht said.
Pierson also expects companies to start investing more capital once the country picks a new commander in chief.
"That's certainly having an impact. I think that companies will have a better idea of the path forward after this election, and you're going to see capital begin to make investments very soon after the new year," Pierson said.
According to the Houston-based consulting firm Graves and Co., the oil and gas industry cut more than 350,000 jobs worldwide in recent years.