The oil slump-stricken Lafayette area could begin to add jobs in 2019, about 1,600 of them, but likely will first experience another slight down year of 800 jobs in 2018, an economic forecast shows.
The good news for Lafayette is that the rate of job losses, which ripped away 10.6 percent of employment over the past two years, is slowing, said Loren Scott, author of the Louisiana Economic Outlook. To get an idea of how bad that was for Lafayette, total U.S. employment during the Great Recession of 2008-2009 fell 6.1 percent.
Meanwhile, the Houma-Thibodaux area lost 16.4 percent of its jobs over the past two years.
"That's the bad news for the state is that the oil patch has not recovered fully yet. It's still in a state of decline," Scott said Wednesday in a Baton Rouge release of the report.
Helping soften the blow from the oil and gas sector are performances from Lafayette's "Big Four" — jewelry maker Stuller Settings, Acadian Ambulance, health care consultants Schumacher Group and home nursing firm LHC Group.
More than $60 million budgeted for road projects and a growing high-tech sector also will help, Scott said in the Louisiana Economic Outlook.
Statewide, the oil patch-driven recession has finally ended, and Louisiana is expected to add 12,000 jobs in 2018 and 22,300 in 2019, growth of 0.6 percent and 1.1 percent, respectively. While Lafayette and Houma-Thibodaux aren't expected to start recovering until 2019, the state's other seven metro areas will add jobs both years, the report said.
"If our projections are on the mark, the state should reach 2,013,600 jobs in 2019, the first time it has exceeded 2,000,000 jobs on an annual basis in its history," Scott said in the report.
In comparison, the Federal Reserve Board projects the U.S. economy will grow by 2 percent in 2018 and 1.8 percent in 2019.
The report said Lafayette's economic recovery largely boils down to when drilling in the Gulf of Mexico makes a comeback, which analysts say will require higher sustained oil prices. Comfort levels would rise if prices are able to drift upward toward $60 a barrel by the end of 2019, the report said.
The oil slump is affecting many of the region’s manufacturers, especially fabricators with close ties to the extraction industry, the report said. At the Port of Iberia, Dynamic Industries has completed work on Shell’s module for the Appomattox Platform and reduced its labor force from 500 to 350. That number should remain stable over the next two years because the firm was awarded a contract for 92 different process modules for Shell’s Franklin Project in Pennsylvania. Bayou Coating just completed $14 million in flow lines for the Appomattox Project and expects to maintain its 360-person workforce.
More uncertain is the outlook at Omega Fabricators, which finished constructing the pipeline end terminals for the Appomattox. The firm employs about 100 now and is looking for more work, the report said.
At Acadian Airport, Haliburton completed its $68 million facility and was recently awarded the completion work for the Appomattox. Haliburton has 500 employees at the site and expects stability.
At the Lafayette Airport, Bell Helicopters has been in the development stage for the 525 Relentless Helicopter. Employment was at 25 during the development stage, and is projected at 90 by the end of 2019 as the aircraft goes into assembly.
In the high-tech sector, information technology company CGI at the ULL Research Park is at 300 employees, ahead of schedule, with plans to add 100 more jobs by 2019. Online restaurant delivery firm Waitr has about 200 jobs in Lafayette, out of 4,000 in 20 markets, and expects further growth.
However, two high-tech companies, Proficient and Enquero, are behind previously reported hiring schedules, the report said.
Major road projects out of $350 million the state has issued in the Lafayette area include $101.8 million to widen Interstate 10 from La. 328 to La. 347; $21.4 million to replace a bridge on U.S. 90 at La 14; $10.5 million for a new interchange at Ambassador Caffey.
Here's the outlook for the state's other metro areas:
BATON ROUGE: The massive industrial projects that drove the area's economy are all but complete. In 2018, the region will add 2,900 jobs, a growth rate of 0.7 percent, and 3,300 jobs, a growth rate of 0.9 percent, in 2019. In last year's Economic Outlook, Scott estimated the Baton Rouge area would add 4,500 jobs each in 2017 and 2018.
NEW ORLEANS: Huge industrial projects, especially in St. James Parish, will help drive growth. New Orleans is projected to be the state's third fastest-growing metro, adding 4,600 jobs, an increase of 0.8 percent in 2018. The report describes 2019 as "a year of new groundbreaking" with the area adding 7,600 jobs, or 1.3 percent. Significant expansions in the region's health care sector, airport construction and expansion of the WWII Museum will further boost the economy.
HOUMA-THIBODAUX: The shipbuilding industry will continue being hammered in 2018, adding to the continuing woes in the oil and gas industry. Expect a loss of 1,800 jobs. In 2019, additional hires at Gulf Island Fabricators, higher sustained oil prices and a significant new LNG facility at Port Fourchon should be enough to add 700 jobs in 2019.
HAMMOND: The streak of adding about 600 jobs a year since 2015 will continue in 2018 but slow to 400 jobs in 2019. Slight additions to employment at North Oaks Hospital and some of the region's smaller manufacturers will help. But Southeastern Louisiana University's budget, enrollment and employment will be affected by how the state resolves the fiscal cliff.
LAKE CHARLES: The 4 percent to 5 percent growth fueled by $126 billion in industrial announcements since 2012 will slow to 1.6 percent in 2018. But sometime in the latter part of 2018 or early 2019, construction will start on two to three liquefied natural gas projects and return growth to 4 percent for 2019.
SHREVEPORT-BOSSIER CITY: After almost a decade of decline, the area will begin two years of moderate growth, adding about 1,400 jobs a year, or 0.8 growth, over 2018-19. A rising rig count in the Haynesville Shale, gains in the high-tech sector and state road contracts will help.
MONROE: Over 2018-19, the area is projected to add 800 jobs a year and set new employment records in 2018. Expansions at CenturyLink, IBM and Vantage Health Plan are leading the recovery.
ALEXANDRIA: A special two-year information technology project at Cleco, hiring at Union Tank Car and new hires at Crest Industries are expected to reverse the area's employment fortunes. The area will add 300 jobs per year in 2018 and 2019. But the major job boosts expected from three major projects will not materialize. Developers have pulled the plug on Sundrop Fuel's $450 million biofuels plant, Investimus Foris' $265 million ammonia plant and Revolution Aluminum's $1.5 billion complex in Pineville.