Industrial construction related to Baton Rouge’s petrochemical and area oil and gas industries will drive strong job gains in the Capital Region in the next two years.
The region is expected to gain 4,400 jobs in 2012 and another 3,300 in 2013, according to the 30th annual “Louisiana Economic Outlook: 2012 and 2013,” co-authored by retired LSU economist Loren Scott, a long-time follower of the state’s economy.
The report’s other authors include LSU economics professors James Richardson and John Rhea.
“We have a very positive future, and one of the primary reasons for the boom is the chemical industry,” Scott told a packed ballroom of some of the region’s top business leaders at the Crowne Plaza Hotel on Wednesday.
Baton Rouge — the state’s second-largest metro region after New Orleans — will see the most job gains, according to the report, though the rate of growth is not as strong as some other metro markets in the state.
Scott’s outlook for the Baton Rouge region comes despite a sluggish national economy that has been slow to recover from the recent recession, the longest and deepest recession since the Great Depression.
Statewide, the forecast predicts 13,700 new jobs for Louisiana in 2012 and 14,800 in 2013, for annual annual growth rates of 0.8 percent and 0.9 percent.
Capital expansion and upgrades along the Mississippi River petrochemical corridor, driven by low natural gas prices, are expected to buoy the Baton Rouge region for the next two years, Scott predicts.
Some $3.4 billion in industrial construction has been announced for Baton Rouge, Scott said, adding oil extraction activity related to the Tuscaloosa Marine Shale formation stretching across central Louisiana and into the Feliciana Parishes remains, “the real sleeper for you to watch going forward.”
Other economic watchers agree the Tuscaloosa Shale deposit could pay big dividends to the Louisiana and, especially, Baton Rouge economy.
“The big swing factor that he alludes to, that still is an upside opportunity that has not been fully defined yet, is the Tuscaloosa Marine Shale,” echoed Adam Knapp, president and CEO of the Baton Rouge Area Chamber. “That really won’t be known until, we think, later in the year or maybe early next year.”
Oil and gas activity also is expected to help drive the oil patch and oil service economies of Lafayette and Houma and the petrochemical-related economy in Lake Charles.
The two-year outlook is 5,200 jobs for Lake Charles, 4,400 (4,200 in chart????) for Lafayette and 2,200 for Houma.
Lake Charles is projected to see 5.6 (5.5%???) percent job growth over the next two years, the strongest in the state.
The gains are largely due to increased activity around that region’s 19 chemical plants and two refineries as well as gambling and aircraft repair.
The outlook is less rosy for New Orleans, the state’s largest metro region.
The forecast projects zero job growth next year and a net loss of 600 jobs in 2013.
The reductions are largely due to the closure of the Avondale Shipyard, reduced construction spending — falling $2.5 billion from 2010 — and vanishing BP payments related to damages as a result of the 2010 oil leak.
Some $1.3 billion made its way into the New Orleans economy in the wake of the disaster, the report said.
“I’m certainly significantly more optimistic about the outlook of New Orleans than Dr. Scott,” said Stephen Moret, secretary for the Louisiana Economic Development department.
“There are a lot of positive things happening in that part of the state right now that are going to continue,” he said. “Now, certainly there’s the challenge of Avondale, but there are other projects in the region that I think are going to offset (Avondale).”
Moret said the New Orleans region has seen a noticeable uptick in entrepreneurial activity.
The region is also home to a significant number of jobs in the state’s chemical and energy industries.
“I agree with Dr. Scott’s outlook, in this regard, that the chemical industry prospects are very, very bright for many billions of dollars of new capital projects over the next few years,” Moret said.
“The river corridor continues to be a positive bright spot for both economies,” Knapp added.
In the Shreveport region — the third-largest metro area after Baton Rouge — the economy will continue to add jobs, due in large part to activity related to the Haynesville Shale natural gas deposit, the report said.
The area also has a growing casino gambling economy and defense spending related to Barksdale Air Force Base.
Looming over northwest Louisiana is the closure of the General Motors manufacturing plant in 2012, where some 800 high-wage jobs will disappear.
Both Monroe and Alexandria, the state’s two smallest metros, will add only a few jobs in 2012 and 2013, as activity remains steady but with no large economic gains, the report said.