Louisiana has made slow but positive economic progress this year, expanding production and gaining jobs amid a milder U.S. economy beset by tariffs, high inflation and worsening affordability for residents and small businesses.
Louisiana Leads in GDP Growth
New first-quarter data released by the U.S. Bureau of Economic Analysis show Louisiana leading much of the country with 2.9% growth in gross domestic product, which measures the total value of the goods and services produced. The figure puts Louisiana behind only five other states and above the national GDP rate of 2.1%.
Baton Rouge economist Loren Scott, who provides a forecast each year for the Southwest Louisiana Economic Development Alliance, called those GDP rates “mediocre,” saying the ideal rate is closer to 3.5%. Industrial manufacturers are coming to Louisiana for a few main reasons, he said. The state has relatively cheap natural gas, a generally friendly business climate with generous corporate tax breaks, and offers deep-water shipping ports along the Mississippi River and the state’s coast.
Challenges for Small Businesses
While data centers and industrial projects have stimulated the economy, they could drive up construction and energy costs. President Donald Trump’s tariffs and the war with Iran have also inflated goods and services across the economy by 4.6%, continuing the affordability crisis for residents and other businesses, Scott said.
The cost of insurance has been a key factor of rising costs in Louisiana. The state’s recent policy efforts to address it have had some mixed results so far, according to recent rate filings available from the Louisiana Department of Insurance.
For example, florist Herb Oldknow, who owns Herbivore Floral Designs in New Orleans, saw his costs climb while his sales dropped sharply during the second half of 2025. “I literally thought I was going out of business last year,” Oldknow said. “Every bill has gone up. Insurance has doubled.”
Kendrick Slan, owner of Omega Insurance Group in Baton Rouge, said insurance rates skyrocketed after five named storms struck the state over a 12 month period from 2020 to 2021. He has seen a few rate decreases this year but no across-the-board premium drops so far that might indicate a trend.
Original reporting: KTBS 3 (Shreveport) — read the source article.
