(Originally run in the American Press, 2/15/2022)
This year, 2022, should be a good one for business in Southwest Louisiana — with much of the outcome dependent on the COVID impact, inflation, and supply issues.
Our Alliance in-house economist, Dr. Dan Groft of the McNeese H.C. Drew Center, reports that looking back to last year, the taxable sales in Calcasieu Parish increased by over $1.4 billion from 2020 to 2021. This represented a 24.2 percent increase.
The largest absolute increase in taxable sales was from building materials as the area continued rebuilding in 2020. The increase was $319 million (+40.4 percent). This figure was also increasing through late 2020. Other large absolute gains occurred in general merchandise ($213 million), manufacturing (+$184 million), motor vehicles (+$175.9 million), and miscellaneous services (+$133.3 million).
The economic recovery from not just the storms, but the COVID shutdowns, is evidenced by the large increases in restaurants (+23.9 percent), gaming (24.6 percent), and apparel (+37 percent).
This can also be said of the large gain in manufacturing as local, national, and global demand has picked up.
Further evidence of storm recovery is shown in large percentage increases of sales in building materials (+40.4 percent), furniture (+33.1 percent) and utilities (+43.6 percent).
According to nation-al forecasts by ICSC, an international retail and real estate organization, despite a 40-year high in 2021, the rate of inflation is expected to cool as the Federal Reserve raises benchmark rates. Retail sales are projected to grow over 5.9 percent with much of that attributed to the increase in the price of goods versus the volume of goods sold. Apparel sales are projected to decline 2.5 percent.
The 2022 consumer spending outlook is strong. Thirty-nine percent of our population is projected to move to a new dwelling and 37 per-cent will change jobs. 46 percent are anticipating making major big dollar purchases including vacation travel. Thirty-three percent are planning a vehicle purchase such as a car, truck, motorcycle, RV or boat. Thirty-two percent are expected to purchase large electronic items such as top-of-the-line TVs, computers, and smartphones. However 58 percent are concerned about inflation or rising prices of goods and services and 48 percent are concerned about new COVID variants.
Locally, we have seen new retailers coming into our market or planning to do so in 2022. Rebuilding will continue as insurance settlements are received so retail sales tax income should continue at a strong pace.
Industrial prospects continue to look at our area and we expect several major projects getting underway in the next few months. With the announcement in December that Venture Global will proceed with a new LNG plant known as CP2 next to their newly opened one in Cameron Parish and the word that Driftwood LNG will be-gin construction in April, we can expect to see the beginning of the second wave of an economic boom.
Despite the impacts of natural disasters, there is plenty of opportunity for existing and new businesses. This is also a good time to consider starting a business. Perhaps there is a niche in your field or you believe you have a better way to provide goods and services. The SWLA Alliance and SEED Center Business Incubator can help you refine your business plan. Numerous resources and training programs are available for start-ups in our five-parish region. If interested, call me at 337-433-3632.
Our ability to recover and strengthen our area’s economy depends on our willingness to embrace change. As Benjamin Franklin said, “When you’re finished changing, you’re finished.”
I don’t think South-west Louisiana is finished by any means. We’ve got much to do and our economic future is bright.