A parade makes its way through the Seventh Ward in New Orleans on Sunday to mark the fifth anniversary of Hurricane Katrina. (Amber Hildebrandt/CBC)A colourful throng danced through the streets of the hardest-hit areas of New Orleans on Sunday afternoon in one of many commemorations across the city to mark the fifth anniversary of Hurricane Katrina.

Participants carried large black panels naming many of the more than 1,800 people killed when the hurricane made landfall and the city's protective levees broke, causing widespread, devastating flooding.

Despite intermittent rain on Sunday, about 300 people joined the parade as it made its way from the Lower Ninth Ward, a focus of the worst destruction, through other ravaged areas. For many, the event was both a memorial for lives lost and a celebration of survival.

Brian Johnson said he took part in the festivities to celebrate the life of his mother, who drowned after Katrina struck. "I'm still going to celebrate for her even though she's not here today," said Johnson. "It's her memory right here, walking and having a little fun with all the friends in New Orleans."

Young and old took part in Sunday's Katrina observances. (Amber Hildebrandt/CBC)

The event demonstrated the Lower Ninth Ward community's ability to unite in the face of tragedy, said parade organizer and record company owner Sess 4-5. "This is something from the community, by the community. The people do this to honour the lives."

Much of the Lower Ninth Ward remains in disrepair.

Difficulties in rebuilding New Orleans since the 2005 disaster have been compounded by the economic downturn and the recent Gulf oil spill.

Fight 'until the job is done'

U.S. President Barack Obama brought a message of hope in a one-day visit to the still recovering city, speaking at Xavier University, an institution badly damaged by the hurricane.

"In the years that followed, New Orleans could have remained a symbol of destruction and decay," Obama said. "But that is not what happened."

"It's not what happened at Xavier. And it's not what happened across New Orleans and the Gulf Coast. Instead this city has become a symbol of resilience and of community."

Obama vowed to see the rebuilding through to completion. "My administration is going to stand with you, and fight alongside you, until the job is done."

Despite worries people would never return to the city, Obama said New Orleans is now one of the fastest-growing cities in America and is experiencing a surge of small businesses.

But statistics paint a less rosy vision. Five years after 80 per cent of the city flooded, New Orleans has only three-quarters of its pre-Katrina population, and about 55,000 abandoned buildings remain. The rate of homelessness has doubled since 2005, and the murder rate remains the highest of any American city.

Ex-mayor's regrets

Former mayor Ray Nagin admits he has regrets from his time in office during the catastrophe, including not calling the mandatory evacuation order eight hours earlier, and not preparing residents for the monumental task of rebuilding.

"People came back thinking the recovery was going to be a lot easier," Nagin said.

Overall, though, Nagin is upbeat about the direction New Orleans took since Katrina.

"Our economy is strong. Unemployment is at its all-time low. We've got construction everywhere," said Nagin. "We still have a long way to go but we're doing very good."

However, he says that even though the city's improved levee system and the current state of the government could cope with a Katrina-like disaster, he worries it could fall apart with anything stronger. "America's still not ready for major catastrophes."

The Army Corps of Engineers is expected to complete the levee upgrades by 2011, and says the resulting defence system will keep most of the city dry in the event of another Katrina-like storm.

Despite constant fear of the next hurricane in a city beset by them, residents continue to rebuild and remain undaunted by the amount of work still to be completed.

Marilyn Hayden, 52, has been helping her 85-year-old mother rebuild her Lower Ninth Ward home for the past five years, even though it's slow going. They are still completing the basic structure.

"We have walls now," she says, proudly. "There's a roof and there's shingles." While Hayden's two sisters sold their homes to the state and she moved to an apartment in the French Quarter, her mother has vowed to move back. "It's her home."

At the end of the day, Hayden said, "It doesn't matter where you are, how far you've gone. It matters that your soul is still here."