Louisiana’s economic dependence on healthy energy, mining and agriculture sectors means the state is among 10 in the U.S. expected to be hit hardest by the recent downturn in commodities.
As Bloomberg reports, the impact of what it calls “the brutal commodities meltdown”—the publication’s Commodity Index last week reached a 13-year low and has plunged 61% since its peak in 2008—has been vastly different across the United States.
On a map compiled by Bloomberg showing the 10 states to be most adversely affected by the commodities downtown, Louisiana is listed at No. 9, with 10.1% of its gross state product said to be dependent on mining and agriculture.
“The top nine states on the map got at least 10% of their gross state product from energy, mining and agriculture last year: Wyoming, Alaska, North Dakota, West Virginia, Oklahoma, Texas, New Mexico, Louisiana and South Dakota,” Bloomberg reports. “Another six got more than 7%, compared to just 3.9% for the U.S. as a whole.”
Wyoming—home to most of the top producing coal mines in the U.S—is expected to be hit hardest, as its mining and agriculture industries generated 36% of its economic output in 2014, according to Moody’s Analytics’ calculations using Commerce Department data. On the other end of the spectrum, New Jersey, Massachusetts, New York, Rhode Island and Connecticut have almost none of their economies in those industries, just 0.3%or less.
A year ago, Federal Reserve policy makers and many private economists viewed falling oil prices as an economic boom that would boost consumer confidence and spending. While there’s been some evidence of that in restaurant sales, for example, it’s been partly offset by the slowdown in mining and farming that has reduced employment in a checkerboard of states.
The commodities collapse has cut monthly employment gains in the U.S. by around 50,000 a month this year, estimates Mark Zandi, Moody’s chief economist in West Chester, Pennsylvania.
“Growth has slowed sharply in the commodities-producing parts of the country, most significantly in the energy sector,” Zandi says. “The very heady rates of growth of recent years have given way to pedestrian growth and in some places no growth at all.”
