When you are at the center of one of the world’s great petrochemical centers, there are always going to be benefits and liabilities. Obviously, the benefits are high-paying jobs in technical fields and the many economic spinoffs of those jobs. A downside that must be carefully watched are emissions and air quality’s impact on long-term economic growth.
All that said, there’s a lot that’s promising about being in Louisiana’s capital region in the next two years.
The crystal ball used by economist Loren Scott and his colleagues can’t be right all the time. The nine-parish Capital Region suffered in 2019 from layoffs at closures of facilities in the northern part of East Baton Rouge Parish, including a Georgia-Pacific paper unit. As a result, the 6,000 additional jobs that Scott projected for this year will be a bit off.
But the Scott projections for 2020-2021, unveiled at a Baton Rouge Business Report event, are for significant growth tied to the industrial construction sector.
As key economic drivers, names like Methanex, Shell, Shintech and ExxonMobil are contributors to the robust increase in jobs. Scott’s team projects the region will add 5,700 jobs in 2020 and 6,000 jobs in 2021, a 1.4 percent growth in each year.
Even with other regions of the state mostly showing positive numbers, the Baton Rouge area is punching above its weight in job growth, about a fourth of all new jobs projected in Louisiana.
"Never has this (metro area) experienced an industrial expansion like the one presently underway," Scott said in the report.
Since 2012, petrochemical companies have announced $16.8 billion of industrial expansion projects, but $11.5 billion of those projects are either under construction or have been completed.
"The real driver for Baton Rouge's much improved growth rate is the resumption of activity in the industrial construction sector,” Scott said.
Industrial construction is a major job contributor, but obviously Louisiana and the Baton Rouge area should continue efforts to diversify. The significant impact of the collapse of oil prices in 2014 was a big drag on employment in the oil patch, which is based on servicing production.
Major refining and petrochemical manufacturing facilities in both Baton Rouge and the Lake Charles area along the Calcasieu River trended in the opposite direction, growing because of low natural gas prices.
There remain, as Scott pointed out, geopolitical risks: The tariff war between mainland China and the United States is not good for business, and a settlement is needed to help both countries.
All told, though, Baton Rouge is well-placed to grow. It’s a good position to be in.