Earlier this week the GBEDF had the opportunity to join with Louisiana State University – Shreveport, Bossier Chamber of Commerce and the Greater Shreveport Chamber of Commerce to host a virtual economic update with the Dallas Federal Reserve President and CEO, Robert Kaplan. Kaplan provided an overview of the state of the current economy and shared insight on what to expect for the future. Dr. Larry Clark, LSUS Chancellor, served as the event moderator of the live Q&A portion of the program as northwest Louisiana business leaders were able to submit questions for discussion to President Kaplan. While the economic outlook was the main focus of the event; disruptive technology, educational attainment and workforce topics were also included in the discussion as they relate to current and future state of the economy.
Impacts on the economy due to the coronavirus anchored Kaplan’s remarks. During the second quarter of 2020, the month of April saw a steep GDP decline by 32 percent. The decline was expected due to the severity of the virus at the time; however, the market saw a quick rebound through the summer months. This swift rebound can be attributed to the stimulus bill which is keeping household income levels steady so far throughout the pandemic. When there is market retraction, a drop in consumer spending and household income levels accompany an overall economic decline; however, that is not the case for the U.S. economy. The effects of the pandemic have hit certain businesses by industry as trends in consumer spending have shifted due to the pandemic. For example, the market has seen an increase in consumer spending on home improvement purchases rather than entertainment. Kaplan noted the Federal Reserve had plans to keep a close eye on future viral resurgence to monitor the effects on the engagement in the economy, the severity of burden on the healthcare systems, as well as the federal stimulus bill to assist the unemployed. The overall expectation for the economy is a sluggish start to the first quarter of 2021, with an uptick later in the year as unemployment numbers fall. Specifically, for our region in Louisiana, the oil and gas market will continue to see a decrease due to the global supply versus the demand. The more activity in the market will increase the demand for fuel, but the increase in the number of people traveling to work and for leisure won’t be seen for some time until there is more confidence in the safety to participate in the economy.
An additional focus of conversation was the ability of the workforce to adapt rapidly to technology. There has been a push for businesses to operate virtually and work remotely in order to comply with social distancing measures, essentially forcing employees to embrace technology. Communities with a technologically agile workforce will benefit from this new normal way of working as many companies and businesses have seen increased profitability due to their employees working remotely. It’s important to note that remote working capabilities may help to increase workforce draws from smaller, often overlooked metropolitan areas. In some cases, employees may be living in remote based areas that can find it hard to get an internet signal, luckily this can be rectified by using such plans as viasat satellite internet as well as similar other rural services, for those locations that require it so that remote working can be ongoing for everyone. Educational attainment was also noted as a way to boost the future economy. Kaplan highlighted that those among the high-risk and lower income level population groups were more susceptible to feel negative economic effects brought on by the pandemic as this group typically has a lower educational attainment. Increasing educational attainment for communities will help close skills gaps and increase employment opportunities for at-risk populations.
The GBEDF is thankful to its partners and for the opportunity to host the Dallas Federal Reserve in the region. It is important that northwest Louisiana is both represented and engaged in open dialogue of monetary policy discussion. Our region is home to critical industries which help to sustain not only the local economy but also contributes to the wider health of the U.S. economy. Opportunities such as these allow us to better understand and discover new ways in which our local industries can contribute on the global scale.