Big Easy’s economy is looking up
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Kai Ryssdal:Economically speaking, this isn’t really a time for parties. But today is Mardi Gras, which means in New Orleans the good times will roll — recession or not. And the economy there has more to revel in than just an influx of tourism dollars. Kate Archer Kent from Red River Radio got the pulse from beyond Bourbon Street.
Kate Archer Kent:Nothing says New Orleans like glittery parade floats and throngs of tipsy tourists. City officials estimate that Mardi Gras makes New Orleans more than $1 billion each year. Janet Speyrer is an economist at the University of New Orleans. She says her city has good reason to celebrate. While the recession eats away at other cities, the Big Easy’s economy is doing — dare we say it — pretty well.
JANET SPEYRER: For the first time, the United States is looking at us and wanting to know, was it worth saving New Orleans? And as a resident and someone who works and watches the numbers, it’s obvious that New Orleans is making a comeback.
New Orleans was maimed by Hurricane Katrina, but today Speyrer says the city’s unemployment rate is a healthy two points below the national average. Over the last year, she says, people have found work in a growing tourism industry and in a massive construction boom.
SPEYRER: Roads were being repaired. Bridges were being repaired. Flood control projects and the levees were being worked on.
That kind of reconstruction work has buffered New Orleans from the wider recession. Cynthia Sylvain-Lear is deputy chief administrative officer for the city. She says more than 300 municipal buildings need repair. There’s plenty of work to around, she says, but there aren’t enough architects in New Orleans to get it done.
CYNTHIA SYLVAIN-LEAR: We’ve had architects that are just so overloaded that we’ve expanded our scope beyond our area and region. And, we anticipate we will have the same problem with construction.
Most of the money funding New Orleans’ building boom comes from the government. Homebuilder Fernando Arriola started six new jobs this week. But he knows that federal cash won’t last forever. So he treats every job as if it were his last.
FERNANDO ARRIOLA: We have to be extremely careful and diligent as to how we’re spending our money now because one bad decision can bring you down.
Arriola looks beyond the city limits and he sees the country falling into recession. He knows that when the public money runs out, his work will dry up, unless the banks step in and start lending to builders and buyers. The people developing New Orleans’ commercial spaces are in a similar bind. Kurt Weigle heads up New Orleans’ Downtown Development District. He says more than $500 million dollars in construction is under way in the one-square-mile downtown, but banks’ reluctance to lend is holding back a lot of the development the city needs.
KURT WEIGLE: We’ve got to try to put together some very creative financing just to make standard, high-quality real estate projects move forward downtown. I think as soon as we start to see any loosening of credit at the national level, I think New Orleans — and particularly downtown New Orleans — are going to be off to the races.
Until that happens, things will likely move slowly in New Orleans. Eighty-seven percent of the city’s residents have returned since Hurricane Katrina hit. And more are moving back, at the same rate jobs are being created. Economists say that makes for an unusually stable job market. And in these tough times, that’s a good reason to take to the streets and celebrate.
In New Orleans, I’m Kate Archer Kent for Marketplace.
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