Katrina Anniversary: Where Things Stand on New Orleans' Economy

Five years after Hurricane Katrina hit the Gulf region, New Orleans is still recovering from the disaster -- a recovery now compounded by the worldwide recession and the effects of the BP oil spill.

On this day five years ago, the storm that would become Hurricane Katrina was still called Tropical Depression 12, moving slowly north and west over the Bahamas. No one knew whether this tropical system would become the the long-feared, cataclysmic storm that could overpower New Orleans' complex levee system and fill the bowl-shaped city with water.

Visit ABCNews.com this week for our series 'Katrina: Where Things Stand'

Katrina was that storm, so big that its probability of occurring was once every 400 years. When the rising waters overpowered the levees, roughly 80 percent of the city flooded, causing the deaths of at least 1,464 Louisiana residents, even if the city did not take a direct hit. The Gulf Coast sustained some $135 billion in property damage.

Hundreds of thousands of people were forced to flee their homes, and a portion of the city simply never returned. The population of New Orleans plummeted almost 54 percent, from 455,188 in July 2005 to 208,548 a year later, according to the Greater New Orleans Community Data Center.

Katrina's flooding struck hardest in such residential areas as Gentilly and the Lower Ninth Wardre. While the waters largely spared the Central Business District and the French Quarter, more then 130,000 homes were damaged in the storm, some 70 percent of occupied units.

City Recovers From Storm, Struggles With National Recession

Five years later, the city has made great strides. But while rebuilding fueled the economy in the initial years following the storm, the recovery has slowed as the nation struggles against a long recession.

Now there's new fears about the long-term effects of BP's oil spill on the economic health of the region.

"We are five years into a 10- to 20-year recovery," said Allison Plyer, the chief demographer at the Greater New Orleans Community Data Center.

For Plyer, who's tracked every facet of the recovery by the numbers, New Orleans' progress can be summed up this way: "The glass is half [full]."

The gross domestic product of the New Orleans metropolitan area has continued to grow in the years following Katrina, fueled in part by reconstruction spending. According to the most recent numbers from the Department of Commerce, the city's GDP is almost $9 billion higher than it was in 2005, unadjusted for inflation.

Population Recovers to 80 Percent of Pre-Katrina Levels

The city has sought to restore its pre-Katrina businesses while aggressively courting new industries, including the film industry, IT and the biosciences.

"My take on this is that the people that are here want to be here," said Ben Johnson, the managing director of the New Orleans Chamber of Commerce as he described the high levels of civic engagement.

According to the most recent data from July 2009, the city's population stands at 354,850, nearly 80 percent of its pre-Katrina levels.

"Folks need jobs to come back, and we are not regaining jobs at the pace we were in 2007 and 2008," said Plyer. "We've lost 1 percent of all jobs since the recession started."

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