The massive industrial projects that drove the Baton Rouge area's economy the past five years are all but complete, which means growth will slow over the next two years.
"The decline in construction employment will have an arresting effect on total employment … especially in 2018," economist Loren Scott said in the latest version of the Louisiana Economic Outlook.
The "super-heated growth" that took place from 2014-16 will settle to a more modest pace: 0.7 percent growth, or 2,900 jobs, in 2018 and 0.9 percent, or 3,300 jobs, in 2019.
In last year's report, Scott estimated the Baton Rouge area would add 4,500 jobs each in 2017 and 2018.
The low oil prices that have mired Louisiana's economy in a two-year slump will continue to …
Job losses in industrial construction will be partially offset by four health care projects with an estimated combined cost of about $500 million; the Baton Rouge port; and the high-tech sector, Scott said. However, resolving the state government's "fiscal cliff" — the $1 billion budget shortfall that will hit midyear — likely will hamper job growth.
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 from the oil slump 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.
Despite the industrial construction slowdown, a number of large projects now underway continue to generate hundreds of jobs for the Baton Rouge area, the report said. The projects include Shintech's $1.4 billion ethane cracker and related projects in Plaquemine; Shell Chemical's $717 million olefins plant in Geismar; and BASF's $300 million expansion in Ascension Parish.
Other projects also could help reverse the construction lull. Shell is expected to begin construction on a $200 million liquefied natural gas facility in Geismar in 2018. Shintech recently bought the Carville site from Eurochem, which Scott said suggests "a favorable new announcement" may be coming.
The Baton Rouge area economy will add about 6,000 jobs in 2017, a growth rate of 1.5 percent…
Meanwhile, LyondellBasell is considering Ascension Parish as a possible site for a new plastics plant with an estimated price tag of $3 billion to $4 billion, and Methanex is thinking about putting a third methanol plant in Ascension.
The construction estimates do not include the impact of the companies that Louisiana Economic Development is currently recruiting, Scott said.
The health care sector also will provide a construction boost. Our Lady of the Lake's new $230 million Children's Hospital is the largest project. Construction started in early 2017 on the 350,000-square-foot, 130-bed facility and medical office building. Completion should occur in 2018. Provident Protoncare is planning an $85 million proton radiation therapy center in Baton Rouge that would open in 2019 and will hire 95 people at an average salary of $105,000.
Ochsner is planning a $100 million investment in Baton Rouge, including a new medical office building and 10-bed micro-hospital and surgical center near the Mall of Louisiana. Baton Rouge General announced a $30 million, 10-bed neighborhood hospital in Prairieville that will house a 60,000-square-foot lab, 14-bed emergency room and physician office space. BRG's second project is a $40 million expansion at its Bluebonnet site, which would add four floors, a helipad and operating room space.
Here's the outlook for the state's other metro areas:
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.
LAFAYETTE: Solid performances from Lafayette's "Big Four" — jewelry maker Stuller Settings, Acadian Ambulance, health care consultants Schumacher Group and home nursing firm LHC Group — will help lessen the pain from an oil and gas sector that's still in a recession. More than $60 million budgeted for road projects also will help.
The report said if oil price forecasts are near the mark, the Lafayette area will begin to add jobs in 2019, about 1,600, after experiencing another slight down year of 800 jobs in 2018.
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 oil and gas 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.