New report: Louisiana economy shrinks to lowest in region

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Performance indicators released Friday show Louisiana’s economy shrank by 1.7% over the first few months of 2025 and is moving in what one expert called a “sideways” direction marked by sluggish growth and contractions at both the state and national levels. However, it’s not yet in recession territory, analysts say.

New first-quarter data that became available last week showed the U.S. economy slowed further than analysts had initially thought. U.S. gross domestic product (GDP), which measures the total value of the goods and services produced, shrunk for the first time since 2022 and Louisiana posted the worst GDP rate in the Southeast region.

With a shrinkage of -1.7% GDP for the first quarter, Louisiana dropped in the state rankings from 15th to 38th, according to a U.S. Department of Commerce report released Friday. The sectors performing the worst included minerals extraction (mining, quarrying and oil and gas drilling), construction and finance and insurance.

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One bright spot has been the labor market. Louisiana’s jobs market finally recovered from the hemorrhaging that occurred during the coronavirus pandemic five years ago. After lagging behind the rest of the country, the state reached its pre-pandemic mark in February with nearly 2 million non-farm jobs, according to data from the Bureau of Labor Statistics. That number has been inching upward, though it remains to be seen if the trend will continue or level off.

Scott said he believes Louisiana can continue to post job gains. He cited a string of recent announcements from large companies moving into the state such as Meta’s planned data center and Hyundai’s steel plant.

Sharing a different take, Dismukes said he doesn’t see much more room for job gains unless Louisiana can grow its population.

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