Louisiana Economy Forecasting Model Provides Projections for Q4 2024 through Q3 2025

The Department of Economics within the LSU E. J. Ourso College of Business launched the Louisiana Economy Forecasting Model in 2023 as a service to the state. This model provides economic forecasts for Louisiana and the state’s nine metropolitan areas for the current quarter and three quarters ahead. New forecasts are published quarterly.

At the state level, forecasts are generated for four key economic variables: real Gross State Product (GSP) (a measure of the real value of goods and services produced within Louisiana, analogous to national real GDP), total non-farm employment, the total unemployment rate, and the Louisiana house price index. Due to data limitations, only total non-farm employment is forecast at the metro level.

 

Dashboard Highlights 

The forecasts for the fourth quarter of 2024 through the third quarter of 2025 suggest continuing slow growth in state economic activity and slow employment growth in all but four metro areas. 

At the state level, employment for this forecast horizon is forecast to grow at a rate of 1.34%. This means total employment in the third quarter of 2025 is forecast to still be below its peak 10 years ago in the fourth quarter of 2014. In all but the Baton Rouge, Houma-Thibodaux, Lafayette, and New Orleans-Metairie metro areas, employment growth is forecast to be approximately 1%. Forecast growth rates for the Baton Rouge, Houma-Thibodaux, Lafayette, and New Orleans-Metairie metro areas are 1.6%, 2.2%, 2.0%, and 2.3%, respectively.  

The unemployment rate is forecast to continue its slow decline, interrupted by a pandemic spike, from the late-2010 value of 7.8% to 3.4% in the third quarter of 2025.

The disappointing performance of real GSP, the best single measure of overall state economic activity, over the last 20 years is forecast to continue with real GSP forecast to grow very slowly at a rate of 1.1%.

After rising sharply post pandemic, increases in the all-transactions Louisiana house price index slowed sharply in 2022, and house prices are forecast to rise at a rate just less than 1% for the current forecast period.

For context, comparisons for employment, population, real GSP, real GSP per capita, and real GSP per worker are made for the states comprising the Southeastern conference (SEC) for 2018-2023. In 2018, Louisiana had the 8th largest employment in the SEC but slipped to 9th in 2023. Louisiana was the only state in the SEC with a decline in employment over the 2018-2023 period (-1.85%). Results were similar for population; Louisiana had the 9th largest population in both 2018 and 2023, but population fell 1.94% over this period. In terms of the size of the economy (total real GSP), over the 2018-2023 period Louisiana slipped from the last position in the top half of the SEC to the top of the bottom half of the SEC. Louisiana’s relative standing in terms of real GSP per capita or real GSP per worker was and is higher than for real GSP, but, unfortunately, Louisiana slipped in its position for per capita or per worker real GSP from 2018 to 2023.

See the details in the forecast report.  

REVIEW THE CURRENT LOUISIANA AND METRO-LEVEL FORECASTS

 

About the Department of Economics

The Department of Economics at LSU’s E. J. Ourso College of Business offers courses that provide undergraduate and graduate students with strong analytic training and the tools to understand the economic and social problems faced both domestically and internationally. The numerous awards received and peer-reviewed scholarly articles published in high-quality economic journals demonstrate the faculty’s commitment to quality teaching and research.

For more information, visit the Department of Economics or call 225-578-5211.