To offer a glimpse of how the broader economic context will affect rebuilding in the Gulf States, the AIA released “The Economic and Construction Outlook in the Gulf States After Hurricane Katrina,” on October 7. This analysis—written by AIA Chief Economist Kermit Baker, PhD, Hon. AIA, and drawing from material supplied to the AIA by the economics consulting firm, economy.com, and from surveys of AIA members—addresses the economic impacts as well as likely building products and construction labor availability and timetables for the construction.

The eight-page report raises questions about the many factors that will affect the timing and magnitude of both residential and nonresidential building, including the amount of money ultimately earmarked by the federal government for rebuilding, payments by insurance companies for insured losses, and the magnitude of charitable contributions for disaster relief used by households for rebuilding. It explains how, in general, short-term materials and labor shortages in the region will generally be contained over the longer term.

The report also presents separate economic and construction indicators for Louisiana, Mississippi, and Alabama plus materials price estimates and the labor outlook for the region. Taking Louisiana as an example, it explains that, of the states, Louisiana will likely take the longest to recover, as three key components of the state’s economy—energy, transportation/port, and leisure/hospitality—were dramatically affected by the storm. In all, the state economy is expected to decline between 3 percent and 4 percent during the second half of this year, and remain stable next year.

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