Growth forecast for N.O. region first in 2 years

THE NATIONAL economy should continue to improve over the next few months, bringing local economy along for the ride, University of New Orleans forecasters say.

"We are expecting slow growth, but it will be growth," says Tim Ryan, dean of the University of New Orleans College of Business Administration.

Ryan delivered the predictions in a quarterly update of his annual economic forecast for the metropolitan area at a news conference last week.

The New Orleans area stands to see significant economic improvements across the board by mid-year 2003, including benefits from an expected jump in national tourism, an expanding oil and gas sector and another wave of expansion of a software project at the Space and Naval Warfare Information Technology Center at the University of New Orleans Technology Park, Ryan say.

"This expansion will bring their software development to the entire Defense Department," he says. "It will provide somewhat of a shot in the arm for the entire economy."

The predictions were compiled by the UNO Division of Business and Economic Research in a quarterly update to the Metropolitan Report, an annual econoimic model. Last week's prediction was based on statistics from the second quarter of 2002.

Since the second quarter of last year, the region lost a net total of 4,772 jobs, a decrease of 0.8%. Those losses were felt across the board, with manufacturing, transportation and hotel services accounting for the largest declines.

Although some national economists have predicted a "double dip" recession, Ryan says current models discredit that theory.

"The prospects for the future look a little brighter over the next few years. The positives will slightly outweigh the negatives" he says. "This will be, if our forecast is correct, the first positive job growth in New Orleans since 2000."

The area should gain 8,200 new jobs in next few years, with 2,800 added by the second quarter of 2003 and 5,400 more by the same time of 2004.

The expansions are expected primarily in the hotel and oil industries. Tourism, called the "main growth engine" of the area by Ryan, slowed last year, but should begin to increase next year.

"Most of the bleeding appears to be over," he says.

Retail, health services and education services were the only relative bright spots during the past 12 months, with a combined 4,698 jobs added during the year.

Another indicator that bodes well for the area is an increase in the value of goods shipped from area ports. Airfreight and shipping values made hefty leaps forward compared with the prior year, Ryan says.

Foreign trade increased 5.6% to $224 million this year from a total value of $212 million in 2001. Airfreight tonnage also increased, with 49.4% more cargo moving through the area compared with the same time last year. Ryan attributed the jumps to a strengthening world and national economy.

Per capita income in New Orleans also rose, gaining at an average rate of 3.7% since last year. Motor vehicle sales increased by 9.2% since last year.

While energy prices, rig counts and corresponding employment were all down, present indications point to favorable conditions in the oil and gas sector, Ryan says.

An inevitable break in the oil industry's "logjam" stands to pump more jobs and money into the area, he says.

"What has been happening in the oil and gas industry can basically be what we could describe as a paralysis," he says. "The oil and gas industry is not making significant new investment in drilling or exploration anywhere. My personal theory is the oil industry is waiting to see what happens in the Middle East. Uncertainty makes a tremendous chilling effect in oil and gas."

A war With Iraq could translate into a further surge in area exploration, especially if oil infrastructure in the Middle East becomes military targets.

"The domestic capacity that exists at any reasonable cost exists in the Gulf of Mexico," he says. "Even if they do open fields in (The Alaska National Wildlife Refuge) and Alaska, that won't affect things here for several years. They can go get oil in the Gulf of Mexico in a much shorter time frame than anywhere else."

War also should not harm the overall national economy to any great extent, he says.