Thursday, March 23, 2006

Party On, Wayne

Standard & Poors did a study of the economic aftermath of the 2006 Mardi Gras season and concluded that the anual celebration had a positive financial impact on the city.

Although New Orleans is eager for cash in a revenue stream severely reduced by storm damage, Wall Street responded favorably when thousands of local float riders literally threw away their money during Carnival.

"The turnout for the pre-Lenten street bash -- sparse by historical standards but otherwise successful -- showed that the city, even in its shrunken state, can at least provide minimal support to its important tourist, visitor and convention sector as hotels, restaurants and police services seemed to be in place and working well," the Standard & Poor's review said.
But the report is not all rose-colored glasses.

The need for housing is "stark," future government revenue is uncertain, the number of hotel rooms is recovering but still down 26 percent since Katrina and the number of restaurants is 63 percent fewer, the report said. Only about one-fourth the number of pre-Katrina conventions are expected this year. Any expansion in business will be constrained by labor shortages.

The work force for the New Orleans area has declined 32 percent, and the jobless rate, though down since November, is at 8.2 percent, well above the 5.8 percent before the storm. Still, a "dearth of community resources," such as schools and hospital beds, is a concern, the report said.

"Over the next six to 10 weeks, we believe that the Gulf region, and New Orleans in particular, will face critical choices in deciding how to rebuild infrastructure, restore the tax base, and whether to refinance some troubled public sector debt," said Alexander Fraser, Standard & Poor's public finance analyst.

I don't believe anyone living in the area underestimates the difficulty of the road ahead, save for our politicians in Baton Rouge, and are braced for the effort.

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