Massive industrial expansions and high-tech projects mean Baton Rouge is in line to see 5.6 percent job growth over the next two years, adding 21,700 new jobs and making it the second-fastest-growing metro area in Louisiana.
That’s according to the “Louisiana Economic Outlook: 2014 and 2015” released Wednesday and prepared by Loren Scott, a retired LSU economics professor, and Jim Richardson, the John Rhea Alumni Professor of Economics at LSU.
All eight of Louisiana’s metro areas are projected to see job gains and the state as a whole is projected to add 34,200 jobs in 2014 and 33,600 in 2015 for a growth rate of 1.7 percent each year.
While south Louisiana is booming, thanks to cheap natural gas prices and more offshore drilling, north Louisiana is lagging.
“The area above Interstate 10 is not growing as fast,” Scott said during a speech at Crowne Plaza Hotel in Baton Rouge. “There are good things happening, but nothing like in this particular area.”
The Baton Rouge economy is being driven by the $34.7 billion in industrial projects that are either under construction or have been announced. Scott noted in last year’s forecast that the tabulation of industrial projects was $4.1 billion.
“This is a really great place to be right now,” Scott said. “We’re going to really grow because of this industrial construction.”
Baton Rouge is projected to add 12,500 jobs in 2014 and 9,200 jobs in 2015. Scott said those numbers should even be better, because it doesn’t include all of the people who will work in construction.
Between July 2013 and September 2014, Scott said the demand for contract workers will jump from 17,500 to 31,000, a boost that will benefit major industrial contractors such as Turner Industries, Performance Contractors, CB&I, Cajun Contractors and the Newtron Group.
“This is really presenting them with a great problem. Where the heck are we going to get the people to build these facilities?” Scott said.
The demand for more industrial laborers will benefit other sectors of the local economy, including real estate, apartments, restaurants and retailers.
But the growth is about more than industrial projects that want to take advantage of the local supply of cheap natural gas that is powering the economy. High-tech service companies are also a factor.
IBM, which recently broke ground on a customer service center in downtown Baton Rouge, and Ameritas Technologies, a startup software developer with an office in the Chase Tower South downtown, also will add another 1,100 jobs in the next two years.
Baton Rouge has a potential to add even more jobs, Scott said. Stephen Moret, Louisiana’s economic development secretary, has said there are six major projects, including two $2 billion ethane crackers, two $1 billion fertilizer plants and two methanol plants, that have a very high probability of moving into Louisiana.
The capital region has the unique characteristics to pick up one or more of the projects.
There are several factors that could hurt the Baton Rouge economy, including the effect the Affordable Care Act could have on Blue Cross and Blue Shield of Louisiana.
The ongoing drop in the number of state government employees also could hurt Baton Rouge, although Scott notes many of the jobs were lost when government services were privatized, meaning the employees were simply transferred to the private sector. And the $160 million Dynamic Fuels plant in Geismar has yet to reopen.
“While these three concerns are certainly nontrivial, we see little chance they could derail the locomotive of growth on the horizon,” Scott said.
Here are the forecasts for other regions in the state:
NEW ORLEANS: The Crescent City is projected to add about 11,000 jobs by 2015, to see 1 percent annual growth. Construction spending, including $8.9 billion in public sector projects such as the $1.06 billion Big Charity Hospital and the nearly $1 billion VA Hospital, is a key factor in the growth.
LAFAYETTE: Employment in Acadiana is set to go up by 4,100, or 1.3 percent a year. Resurgence in offshore drilling in the Gulf of Mexico will help the exploration and energy companies. The three major private employers — Acadian Companies, Stuller Settings and Schumacher Group — will slightly increase the number of workers.
HOUMA-THIBODAUX: The increase in Gulf exploration is helping energy service firms, such as Danos and Chett Morrison. Shipyards such as Edison Chouest and Bollinger also are expecting to see increased activity. Houma-Thibodaux is expected to add 5,200 jobs, or 2.6 percent annual growth.
LAKE CHARLES: Southwest Louisiana will be the fastest-growing section of the state, thanks to $46.6 billion in industrial construction projects.
This includes the biggest capital expansion project in Louisiana history: Sasol’s ethylene cracker/gas-to-liquids complex, which will be $16 billion to $21 billion. Lake Charles is expected to add 7,800 new jobs over the next two years, an 8.1 percent growth rate for the period. Those numbers could be surpassed.
SHREVEPORT-BOSSIER: After job losses in four of the past five years, caused by the closure of the GM plant and layoffs at Barksdale Air Force Base and Libbey Glass, the city is expected to add 1,800 jobs, or 1 percent job growth over the next two years. The Port of Caddo-Bossier has been booming, with Ronpak and Benteler Steel opening operations.
ALEXANDRIA: Central Louisiana has seen employment losses for five consecutive years. The area is projected to add 700 jobs over the next two years for 1.1 percent growth. Sundrop and Cool Planet Energy, both of which plan biofuels plants in Alexandria, will make major investments.
MONROE: This will be the quietest area of the state, adding 400 jobs over the next two years for 0.6 percent growth. CenturyLink will be one of the bright spots, opening a $30 million Technology Center for Excellence, and promising to create 800 more jobs by 2016.