Surviving the national economy is no small feat, and Shreveport-Bossier’s success is keeping pace with some of the country’s leading communities.
Shreveport-Bossier was recently ranked 9th of 360 U.S. metropolitan areas for gross domestic product growth by the Bureau of Economic Analysis. The area’s GDP grew 7.5 percent in 2010 from $19.7 billion in 2009 to $21.2 billion in 2010. Gross domestic product is the monetary value of all finished goods and services produced within an area’s borders in a specific amount of time.
Statewide, Louisiana’s overall GDP ranked 19th strongest in the U.S., growing at 2.6 percent. Baton Rouge and New Orleans scored 0.4 percent and 2.4 percent gains, respectively, according to the Bureau of Economic Analysis.
The national economy’s growth rate was 1.3 percent in the April-June quarter of 2011, up from an estimate of one percent made a month ago, according to the U.S. Commerce Department. The national economy grew at just 0.9 percent in the first six months of the year, the weakest six-month performance since the recession officially ended two years ago.
The mining and oil and gas industries contributed the most to the Shreveport-Bossier GDP, according to the Bureau of Economic Analysis. Those industries have played a key role in the area’s success for years, and many of the other highest ranked cities also benefited from energy-rich economies. The discovery of the Haynesville Shale boomed that sector for Shreveport-Bossier and surrounding parishes. The direct impact of the shale can be measured by how much new money is injected into the state’s economy by activities of firms operating in the shale.
“The impact the shale and the companies working it makes on the community is substantial on all levels,” said Chesapeake Energy spokeswoman Katie McCullin. “It supports schools, nonprofits and lowers costs all around. It encourages people to stay here and do business.”
Exploration firms inject money through lease payments to landowners, money spent on drilling activities, money spent on administrative costs associated with operating a firm in the area and direct taxes paid to governmental entities, according to a 2010 study on the shale’s economic impact on Louisiana.
The study, “The Economic Impact of the Haynesville Shale on the Louisiana Economy in 2009” prepared by Loren C. Scott and Associates, listed total expenditures and taxes by extraction firms in 2009 at more than $7 billion.
The whole state benefits from the Haynesville Shale, but North Louisiana Economic Partnership President Kurt Foreman said its geographic concentration boosts the local economy through thousands of indirect jobs alongside those directly related to oil and gas.
“It takes investment and spending in an area to do what we see at the Shale,” Foreman said. “We’re pretty blessed to see the flow of billions in such a small area.”
But business outside the Haynesville Shale is also essential for success, Foreman said. The oil bust of the late 1980s, Foreman said, was the wake-up call for local political and business leaders to avoid putting all their eggs in one economic basket.
“We’ve been able to stay proud of our economic diversification for years,” Foreman said. “Everyone pushed for it and we got it.”
That diversification encompasses a healthy retail sector, gambling, food and financial services and a host of other companies and businesses Foreman said are doing quite well despite a bleak national outlook.
Health care, Foreman said, has grown substantially over the years in size and revenue. Health and education are the largest economic sectors locally and statewide.
Barksdale Air Force Base and the Global Strike Command stationed there also boomed for the local economy through job creation, an influx of federal dollars and the indirect jobs related to the caring for base and its personnel, Foreman said. Its direct economic impact is in the billions, he said.
Foreman said Shreveport-Bossier’s ranking among top tier cities in GDP growth shouldn’t be overestimated. It’s an indicator of success, not success in itself, he said.
“The ranking is a good signal for optimism and encouragement, not a destination,” he said. “We need to keep pushing so residents and businesses continue to grow. But it’s nice to know we’ve kept ahead of the sharks.”