Economic activity in Louisiana spurred by oil and gas exploration and production is a bright spot in a sputtering national economy, the head of the Federal Reserve Bank of Atlanta said last week.
The news from the Louisiana energy sector is rosy, Dennis Lockhart, the FRB Atlanta president and chief executive officer, told the Greater Lafayette Chamber of Commerce in Lafayette.
“Business contacts in the region have been reporting an influx of fabrication work and backlogs in orders for pipelines, supply boats, and drilling equipment,” Lockhart said. “In Lafayette, employment in the energy sector has increased very recently, providing a big boost to the local economy.”
The outlook by energy industry executives in the state is more optimistic now than after last year’s massive oil spill that resulted in a moratorium on drilling new deepwater wells in the Gulf of Mexico.
With consumer spending still lacking, the national economy needs the boost it is getting from Louisiana’s energy activity.
“Drilling and finding gas or oil needs to pick up,” he said. “With that should come more people employed and more support industries that are actively supporting the drilling activity.”
Lockhart said the economy is at risk but he does not expect a deeper recession even though unemployment will remain high for some months.
“In my view, there is sufficient fundamental strength in the economy for a modest cyclical recovery to proceed while the process of necessary structural adjustments moves along,” he said.