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Levees still worry businesses in N.O. 
But survey finds greater optimism

Author: Robert Travis Scott Capital bureau
Date: Aug 19, 2006

BATON ROUGE -- The condition of the levees, communications systems and utilities are the major concerns among businesses in New Orleans as they cope with the duress of recovering from Hurricane Katrina, according to a survey conducted by Louisiana State and Tulane universities.

Focused solely on Orleans Parish, the survey conducted in June also found that more business owners saw a brighter future than in a survey taken in December.

"We're seeing some improvement in optimism, even though some people are rating some of the problems as more severe," said Kelley Pace, a finance professor at Louisiana State University's E.J. Ourso College of Business.

Supported by a grant from the National Science Foundation, the surveys are conducted by LSU's Public Policy Research Lab with supervision from Pace, who is also director of Ourso's Real Estate Research Institute; LSU environmental studies professor Nina Lam; and Tulane Center for Bioenvironmental Research geographer Richard Campanella.

Survey callers tried to reach all 8,800 businesses in Orleans Parish listed by the state Department of Labor before the storm, Pace said.

In the first survey in December, 56 percent of the businesses did not answer the phone and 15 percent were disconnected. In the recent survey, 30 percent did not answer and 27 percent were disconnected. The survey does not attempt to reach new businesses.

The results of the latest survey are drawn from 1,418 businesses that gave complete answers to the questions. It has a sampling error of plus or minus 2.7 percent.

The survey asked business owners whether certain issues were major problems. Levees were named a major problem by 45 percent of the respondents, the most of any other concern. Levees scored about the same in December.

Of the problems discussed, communications was second at 37 percent, up from 21 percent in 2005. Utilities was third at 35 percent, up from 20 percent earlier.

Pace said the difference is that businesses are finding that the basics of communications, electricity and water are not improving as well as expected. Services were poor in December, but business people were more likely to believe those conditions would get better soon, he said.

"It's hard to run a restaurant when the power comes in and out," Pace said.

Each business has its own problems and feels strongly about them, he said. For example, 33 percent said levees were not a problem and 42 percent said utilities were no problem.

"Almost every business has a major concern, but not necessarily the same one," Pace said. "People are not wishy-washy on this (survey). They're picking things that are either a real problem or they're not."

In a more general question about the how the companies viewed their prospects for the next six months, the business people showed more optimism than in December. About 60 percent foresaw their prospects as better or about the same as before the storm, compared with 51 percent in December.

The surveys are one component of the study to collect data to better understand the commercial side of resettlement after a catastrophe. The group plans to conduct more surveys in the future.

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Robert Travis Scott can be reached at rscott@timespicayune.com or (225) 342-4197.

Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission. 


September 2006