To collect grassroots economic information, the Atlanta Fed's staff at five branch locations routinely assess conditions throughout the Southeast and discuss Federal Reserve policymaking with area residents. Economy Matters recently spoke with Adrienne Slack, the regional executive at the New Orleans Branch, about the economy in and around the Big Easy, the impact of lower energy prices on the regional economy, and the ongoing rebound of the Gulf Coast from the damage wrought by Hurricane Katrina.
Economy Matters: The Sixth District's most recent Beige Book section
indicated that economic activity continued to improve modestly early in 2016. Any sectors in particular that are doing well?
Adrienne Slack
Industrial construction remains strong in Lake Charles and along the Mississippi River region surrounding Baton Rouge. Other portions of the region are benefiting from hotel, multifamily housing, water management projects, and other commercial initiatives.
EM: The Beige Book also noted that "continued weak global demand and an oversupply of oil and gas were driving down business investment and employment in the District's energy sector." The oil and gas industry has a significant presence in southern Louisiana. How has the decline in energy prices affected your area?
AS: The direct impact of low oil prices is centered in southwestern Louisiana municipalities containing concentrations of oil services companies involved in exploration and production. These areas experienced significant reductions in capital and expense spending through 2015. The cutbacks resulted in layoffs and even some firm closures. As 2015 drew to a close, second-order impacts were being reported and included declines in private school enrollment, consolidation of public facilities, state budget shortfalls, sales tax receipts declines, and slowed real estate transactions.
EM: In general terms, how would you describe the outlook among your business contacts?
AS: On the whole, demand was flat to slightly up, and most contacts expect demand to remain flat through 2016. The energy sector downturn and the appreciating dollar continued to diminish business sentiment. A number of contacts shared that they expected to see increased consumer spending as a result of reduced fuel prices. However, this spending growth did not occur. They cited higher food prices, low wage growth, increased healthcare costs, and lack of optimism as the reasons consumers held onto gas savings.
EM: Last year marked the tenth anniversary of Hurricane Katrina. The storm devastated New Orleans along with other parts of the Gulf Coast. Focusing on New Orleans, the city's recovery has been impressive. How would you characterize the environment in the city today?
AS: The environment in the city remains optimistic and energized as the prolonged recovery turns to ensuring continued momentum. Significant work remains on both recovery-oriented items and issues that were present prior to the storm. However, both lifetime residents and new talent are positioned to push the city forward.
EM: A big part of your job is to speak to business and community groups about the Fed: our history, structure, function, purposes, etc. What kinds of questions do you routinely get?
AS: Speaking to public groups is indeed a big part of the job of all the Atlanta Fed's regional executives. In 2015, we delivered 34 speeches and presentations, and in 2016 to date we have given six. As you can imagine, most questions deal with the economy and the forecast for employment, inflation, and growth. Other questions focus on regional trends, Federal Reserve System responsibilities, decisions by the Federal Open Market Committee, fiscal policy, and local insight. I also recommend to audiences that they visit our website and subscribe to our free publications and other information. I also suggest that they follow us on Twitter.
EM: What should someone do if they want to have a representative from the Federal Reserve speak at an event?
AS: The easiest way is to visit the Atlanta Fed's website and make the request via our Speakers Bureau page.
Mike Chriszt
Atlanta Fed vice president and public affairs officer