An economic forecast released Tuesday said Louisiana is on track to hit 1.9 million jobs by the end of 2023 with the recovery happening faster in some metro areas as major employers such as Amazon and the petrochemical industry look to make investments.
The coronavirus pandemic began in March 2020 and has lingered for 19 months prompting an economic downturn. There were 286,800 jobs lost since April 2020, sinking statewide employment to 1.73 million jobs.
By the end of this year, the Baton Rouge metro area is expected to recover 81% of jobs lost due to the pandemic while the Lafayette metro would bring back 69% and the New Orleans metro would regain 65% of jobs lost.
Economist and LSU professor emeritus Loren Scott presented the report Tuesday at the Baton Rouge Business Report's Top 100 private companies luncheon. The forecast relies on state and national data in combination with interviews of industry executives about their plans.
In general, states such as Texas or Arkansas are recovering faster from the pandemic due to less dependency on tourism or casinos and fewer natural disasters such as Hurricane Laura.
"We're not doing nearly as well as our neighboring states," Scott said.
The forecast is projects a statewide recovery slightly slower than the national average. The forecast is based on the price of crude oil about $65 per barrel, natural gas to stay above $3 per million BTU, the inflation rate to stay below 4% and gross domestic product growth of 6.6% in 2021.
But there are some major headwinds coming by 2023 such as tax changes and more federal regulation, Scott said.
"I really believe the economy is going to significantly slow down in 2023 due to higher taxes," he said.
By 2023, Baton Rouge is forecast to hit 413,300 jobs, New Orleans should reach 596,600 jobs and Lafayette is on track to have 207,900 jobs.
Baton Rouge is anticipated to add 9,700 jobs by the end of 2021, 16,600 jobs in 2022 and 5,300 jobs by 2023. The fastest growth rate would be in 2022 with 4.2%.
New Orleans is expected to add 23,800 jobs by the end of 2021, another 31,800 in 2022 and 11,300 jobs in 2023. The fastest growth rate of 5.7% would occur in 2022.
Lafayette is projected to add 9,200 jobs in 2022 and 2,100 jobs in 2023. The fastest growth rate would be in 2022 with 4.7%.
In the Lake Charles metro area the region is expected to add 9,000 jobs by 2022 and 6,000 jobs in 2023.
Leisure and hospitality alongside the petrochemical industry are major industries to watch.
The importance of tourism in New Orleans means the economy is expected to recover more slowly than other metro areas due to fewer travelers, especially for business.
In 2020, 66 conventions in New Orleans out of 155 scheduled were cancelled. In 2021 there were 48 out of 124 conventions cancelled.
There is $1.4 billion in industrial construction projects underway in the New Orleans area including a $1.1 billion expansion at Diamond Green Diesel in Norco and $234 million in maintenance and upgrades at Shell's Norco facility. There is another $39.2 billion in industrial projects which could reach a final investment decision in the coming years.
There are three liquefied natural gas export terminals in the works such as Venture Global's Plaquemine LNG and Delta LNG. Formosa Plastics is still planning to build its $9.4 billion chemical complex in St. James Parish. Yuhang Chemicals in St. James is considering a $1.9 billion expansion and ElementUS looks to spend $800 million on a plant to extract rare earth elements from the red mud ponds at Noranda Alumina in Gramercy.
The construction sector was hard hit during the coronavirus pandemic because many petrochemical companies decided to postpone development and maintenance projects. But this year, some have loosened up the purse strings, such as work restarting at the third Methanex plant in Gonzales.
In the coming years, Amazon is expected to add thousands of jobs in Baton Rouge through the fulfillment center under construction at the former Cortana Mall site and the regional sortation center being built in Port Allen.
There's $6 billion of work underway and another $7.9 billion in potential industrial projects which have not yet reached a final investment decision which may happen in the coming years. For example, Shintech is working on a $1.5 billion plant in Plaquemine and expects to hire 30 more workers. ExxonMobil looks to spend about $410 million during a refinery modernization effort in Baton Rouge.
Future projects may include a $1.2 billion expansion of Shell Chemical's plant in Ascension Parish. Mitsubishi looks to build a $1 billion methacrylate manufacturing complex in Geismar and Gron Fuels could spend up to $9.4 billion for a renewable fuels complex at the Port of Greater Baton Rouge.
In Acadiana, the manufacturing sector is expected to grow particularly with the new Amazon fulfillment center in Carencro adding hundreds of jobs. Ochsner is partnering with Safe Source Direct to build personal protection equipment manufacturing facilities in Broussard that will employ 1,200 people.
There's the $70 million Delta Biofuels biomass plant planned near Jeanerette and construction is expected to start on a $5.1 million Westfield Hydraulics facility in Lafayette. Turner industries looks to hire 800 workers at its fabrication yard at the Port of Iberia by 2023.
There is some concern about a new federal tax on some petrochemical products used in the manufacturing process such as benzene, butane and ethylene.
"This is a particularly worrisome tax for Louisiana with its very large petrochemical industry," Scott said.
The Shreveport-Bossier City region is expected to add 5,500 jobs in 2022 and another 2,800 jobs in 2023. The expected uptick in the Haynesville shale play alongside a new Amazon facility in Shreveport that will add more than 1,000 jobs would be driving this growth.
The Lake Charles metro area is expected to add 9,000 jobs in 2022 plus another 6,000 jobs in 2023. Those projections are based on the liquefied natural gas export terminal construction and the new land-based Horseshoe Casino Lake Charles, set to open in fall 2022.
The Houma metro area is forecasted to add 2,400 jobs in 2022 plus 700 jobs in 2023. This would be tied to companies focused on repairing vessels in the gulf, such as shipyards.
In the Monroe metro, there are 2,700 jobs anticipated to be added in 2022 and 300 jobs in 2023. The Alexandria metro area is adding 1,100 jobs through 2023. In Hammond, the region is expected to add 600 jobs by 2023.