Lafayette is forecasted fall thousands of jobs short of a full recovery from those jobs lost during the coronavirus pandemic - which has surpassed the economic downturn of the tropical storm flood of 2016, the Great Recession in 2008 and the oil market crash of the 1980s in Louisiana.
Some employers in the Acadiana region, such as those related to the oil and gas sector, were slammed by the economic recession and low gas prices but also lack of demand for oil.
At one point, oil futures were trading in negative territory and Louisiana oil and gas extraction businesses alongside service companies feared bankruptcy.
Public health mandates to curb the spread of coronavirus which is rampant in Acadiana as in other parts of the state meant restrictions on businesses in the market.
The Lafayette metro is expected to be 3,600 jobs of short of full recovery, according to the Louisiana Economic Outlook. That's due to a long-term trend of low oil prices but there is some opportunity for growth with public sector spending in Louisiana.
The annual report is penned by long-time economist and LSU professor emeritus Loren Scott and LSU Center for Energy Studies associate professor Greg Upton. The report relies on state but also national data in combination with interviews of industry executives about future plans. Never, the authors say, has there been so much uncertainty in 39 years of penning the report.
The Lafayette metro had lost 27,100 jobs by the end of April, about one month after the March restrictions began.
Louisiana mandated an emergency stay-at-home order imposed for public health reasons to curb the spread of the coronavirus while global market forces on corporations with U.S. Gulf Coast operations were impacted by lack of consumer demand for petrochemical products such as jet fuel from the state’s refineries.
Likewise, oil and gas extraction companies told trade groups they feared shutting in wells across Louisiana and saw bankruptcy on the horizon despite government support programs.
Statewide, there were 273,200 jobs lost since April 2019 during the first month of the pandemic restrictions, sinking employment to 1.73 million jobs.
As of July, there were 1.83 million jobs across Louisiana, which is a recovery of 18,800 jobs between June and July, according to the Louisiana Workforce Commission.
The Lafayette metro added back 1,700 jobs between June and July for a total of 192,400 jobs total but was still down 10,200 jobs, records show.
In 2019, Lafayette had 204,300 jobs in the metro area but by the end of 2020 there are estimated to be only 193,500 jobs in the market as a result of the coronavirus pandemic.
By 2021, Lafayette is expected to have 198,900 jobs and one year after that grow to 200,700 jobs.
“The last downturn happened over six years, this one happened over six months,” Scott said. “This has been the toughest forecasting market that we’ve ever had to deal with.”
The Lafayette job count is estimated to be down 5.3% by the end of this year from pre-pandemic levels, then grow sluggishly by 2.8% in 2021 and 0.9% in 2022. That means 5,400 jobs would be added in 2021 and another 1,800 jobs in 2022.
The average price of crude oil in 2020 was $43 per barrel and it is not expected to hit $50 per barrel by 2022, according to the forecast. The potential high by 2022 would be $70 per barrel and low would be just shy of $30 per barrel.
While leisure and hospitality sector jobs were impacted in Lafayette, those connected to the oil and gas services industry were hit hardest.
Oil and gas services sector jobs in Lafayette were already weakened by the initial crash of U.S. oil prices in 2014 and subsequent freefall since 2016.
After the coronavirus pandemic began, it also impacted the final investment decision by corporations looking to expand. Oil futures briefly dipped below zero for the first time in history.
Petrochemical manufacturers and refineries alike slashed jobs to meet reduced demand as travelers stopped moving around the world. Maintenance projects at industrial sites were also largely delayed. Several oil and gas services companies in Louisiana filed for bankruptcy. In Carencro, Professional Pumping Services filed for Chapter 7 bankruptcy and auctioned off all its assets in June.
Haliburton closed its Broussard office and took 36 jobs with it, while 180 were laid off at ASRC Energy Services Omega, which supports offshore oil and gas operations. Even the local casino, Evangeline Downs Racetrack, laid off 246 workers in June.
Other industries to watch in Lafayette that are growing include health care and technology. Job gains are expected at medical emergency transport and safety training business Acadian Companies, home health and hospice services provider LHC Group and tech company CGI.
Mining and logging, which includes oil and gas extraction, only employed 10,700 workers in Lafayette as of July, down 2,800 workers over the year. Modest gains of 200 jobs were made between June and July in mining and logging in Lafayette.
Leisure and hospitality sector jobs in Lafayette recovered between June and July by 1,500 jobs and actually added 1,400 workers over the year for a total of 22,600 in that industry cluster.
Professional and business services lost 400 jobs between June and July and year-over-year is down 3,000 jobs in Lafayette.
But there are billions in public sector construction projects on the horizon especially surrounding flood mitigation measures. There is $1.4 billion expected to be spent by the U.S. Army Corps of Engineers in Baton Rouge, $1.2 billion from HUD for flood resiliency protection efforts, $300 million in hazard mitigation grants, $50 million for Livingston Parish to clear 350 miles of creeks and waterways.
While billions in commercial petrochemical industry projects are on hold, the public sector construction spending could boost demand for construction jobs. The $469 million ExxonMobil expansion work in Baton Rouge is paused while the third Methanex plant in Ascension Parish, worth $1.4 billion and was under construction is also on a hard pause.
“It would not be surprising to see construction go from worker surplus problem to a worker shortage problem,” Scott said. “It will take until late 2021 or early 2022 for the national economy to be back to what it was before coronavirus hit.”
There's another $6.2 billion in construction projects in the private sector which are delayed, $1.2 billion for Shell Chemical, $868 million for BASF, $560 million at Nutrien, and two $139 million projects planned by Air Liquide, according to the report.
Between April and July, Lafayette improved by 61% in jobs recovery, data shows.
Among the weaker markets are Shreveport-Bossier City, Lake Charles and Houma which have only recovered 49%, 35% and 33% respectively – all before Hurricane Laura – a Category 4 hurricane made landfall in Louisiana in August. During the same time frame, New Orleans has regained 39% of its jobs and Baton Rouge has added back 51% of the jobs.
The statewide industries where recovery between April and July have happened the most have been state government, other services, retail trade and finance with 193%, 68%, 75% and 71% respectively. Leisure and hospitality jobs have improved by 57% since record lows in April. Those state government jobs have been tied to coronavirus education resources and appear to be funded by the federal government.
The least recovery was happening in mining, which includes oil and gas, which dropped another 12% between April and July. Manufacturing has seen a weaker jobs recovery with only 21% of jobs have been restored since the pandemic began. Construction has regained only 41% of jobs lost since April. Likewise, healthcare and social services jobs which were projected to bode well during a public health crisis have suffered with only 29% of those jobs added back to the Louisiana economy since July.
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