Chamber survey one indicator
The Baton Rouge area will see modest job growth during the next two years, with construction, petrochemical manufacturing, health care and tourism the major economic drivers, the Baton Rouge Area Chamber said Friday.
Economic forecasts point to growth of about 1.5 percent in 2013, or 5,000 to 5,500 new jobs, and 1.6 percent in 2014, or 6,000 jobs, chamber President and Chief Executive Officer Adam Knapp said.
“That’s an incredibly good forecast if you remember where we started, maybe 1,000, maybe 2,000 new jobs (this year),” Knapp told attendees of Baton Rouge Entrepreneur Week.
The area lost jobs in 2009 and 2010 before moving to growth the last two years. Half of the 2012 job growth came from work in heavy and specialty construction, he said.
Knapp said the construction sector will continue to be a key generator of jobs through 2014. Low natural gas prices are spurring new industrial construction and expansions.
Meanwhile, area business owners are growing more optimistic, Knapp said.
Of the 300-plus respondents to a chamber survey, 71 percent expect to see economic growth in 2013, Knapp said. Last year, 47 percent of survey respondents did.
Knapp cited a number of factors in the Baton Rouge area’s favor, including:
- A September jobless rate of 6.2 percent, the lowest level since November 2009.
- Initial unemployment insurance claims were 23.4 percent lower for the third quarter of 2012 compared to 2011. The time people were unemployed is down 33.5 percent this year compared to last.
Both are great indicators of an improving economy, Knapp said.
- Building permits for new, single-family homes were up 17 percent to 736 for the third quarter.
- The region’s sales tax collections were 2.9 percent higher in August than a year ago.
However, another important segment of the economy is less vibrant.
Research and development funding for LSU, Pennington Biomedical Research Center and the LSU AgCenter lags behind other flagship universities, Knapp said. In 2010, the latest data available, the Baton Rouge research centers spent $289 million on research and development. The average amount for Georgia Tech, Texas A&M, the University of Florida and the University of Texas was $645 million.
Knapp said the chamber fears the gap could be getting larger.
State cuts to higher education may be reducing the funding LSU, the AgCenter and Pennington use to go after federal grants, Knapp said. On the plus side, each year, an average of three start-up companies emerge from the research centers.
“We would love to see this number higher for the amount of overall R&D that’s happening,” Knapp said. “But it is a good indication that technology is getting out of the universities and into the marketplace.”