New Orleans Economy: Tourism, Energy, and the Port

The New Orleans metro area — formally New Orleans-Metairie — is the largest metro economy in Louisiana and one of the most distinctive urban economies in the United States. It is the corporate hub of the Gulf Coast oil and gas service industry, the busiest tourism city in the South after Orlando, and the nerve center of one of the largest port complexes on the planet. New Orleans's economy runs on tourism and conventions, energy services, the Port of South Louisiana and the Port of New Orleans, and a steady cluster of healthcare and higher-education employers.

This is a plain-English tour of how the New Orleans metro economy works. For the state-level picture, see Louisiana Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the New Orleans metro economy?

For example, recent metro GDP for New Orleans-Metairie has run around $90 billion, according to the Bureau of Economic Analysis. Metro population is roughly 1.3 million, per the U.S. Census Bureau. That makes the New Orleans metro larger by population than 8 of the 50 U.S. states.

The biggest industries

A handful of sectors do most of the work in the New Orleans metro economy:

• Tourism, conventions, and hospitality — the French Quarter, Bourbon Street, the Garden District, Mardi Gras, Jazz Fest, and the Ernest N. Morial Convention Center together draw tens of millions of visitors a year. Hotels, restaurants, and cultural employers fill out the metro's largest single workforce by headcount.
• Oil, gas, and energy services — the metro is the corporate hub of the Gulf of Mexico offshore-oil and gas industry, with engineering, drilling-services, and supply-boat firms concentrated in suburban Jefferson Parish, the West Bank, and along the Mississippi River corridor.
• Port and maritime trade — the Port of New Orleans handles containers, breakbulk, steel, coffee, and cruise traffic, while the upriver Port of South Louisiana is by tonnage one of the largest ports in the world, moving grain, petrochemicals, and crude. The combined river-port complex is a national logistics anchor.
• Healthcare — Ochsner Health, LCMC Health, and the Tulane medical complex together employ huge numbers of workers across the metro. Ochsner is the largest single private employer in Louisiana.
• Higher education — Tulane University, the University of New Orleans, Loyola University New Orleans, Xavier University of Louisiana, and Dillard University anchor faculty and staff workforces.
• Aerospace and shipbuilding — the NASA Michoud Assembly Facility (which builds the core stage of the Space Launch System) and Bollinger Shipyards add a meaningful federal-contract manufacturing base.
• Film and creative industries — Louisiana's film tax credits have built a steady film, television, and music-production cluster across the metro often called "Hollywood South."

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics Southwest region. For example, the New Orleans metro unemployment rate has typically run a tick above the national average, partly because the tourism and energy sectors swing more sharply with economic cycles than most metros' job mixes.

Louisiana uses the federal minimum wage of $7.25 — among the lowest of any state — though most large hospital, port, and energy employers pay well above it. The latest figures are at the Louisiana Workforce Commission.

Cost of living

New Orleans's cost of living tends to run close to the national average, lower than Houston or Atlanta but higher than other Louisiana metros. For example, recent HUD Fair Market Rent for a two-bedroom in the metro has run around $1,300 a month, with the French Quarter, Garden District, Uptown, and Lakeview higher and parts of Algiers, New Orleans East, and the outer parishes lower. Current parish-level numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS Southwest region. New Orleans's CPI has run close to the national average in recent years.

Taxes in New Orleans

Louisiana has a mildly progressive state income tax with three brackets. Combined sales tax in Orleans Parish is 9.45%, made up of the state's 4.45% base plus a 5% local option — among the highest combined sales-tax rates in the country. Property taxes are moderate by U.S. standards, with a generous homestead exemption that keeps owner-occupied bills low. There is no city income tax. State rules live at the Louisiana Department of Revenue, and you can read more about how sales tax works in our glossary.

How the New Orleans metro fits into the national picture

New Orleans is one of the more cyclical large U.S. metro economies. Tourism softens in recessions and during hurricane disruptions, and the offshore-energy services sector swings with global oil and gas prices. The river-port complex, healthcare, and federal NASA and Coast Guard footprints have steadied the broader employment picture, and the metro's deep cultural-tourism brand has held up across decades of economic shocks.

The port and the river

The Mississippi River corridor from Baton Rouge through New Orleans is one of the most heavily industrialized stretches of waterway in the world, with petrochemical plants, grain terminals, and container ports tied directly into the metro's labor market. Federal data on port tonnage lives at the U.S. Army Corps of Engineers, and metro employment is tracked by the BLS Southwest region.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the New Orleans metro.