The Baton Rouge economy is projected to add 9,000 jobs by the end of 2014, thanks to the booming petrochemical industry.
That forecast could be even brighter, if some potential projects come through.
That’s according to the “Louisiana Economic Outlook: 2013 and 2014” prepared by Loren Scott, a retired LSU economics professor, and Jim Richardson, the John Rhea Alumni Professor of Economics at LSU.
The forecast, released Wednesday, projects Baton Rouge will add 5,000 jobs in 2013 and 4,000 in 2014. There is at least $4.1 billion in ongoing or announced petrochemical construction projects in metro Baton Rouge.
“This is a good place to be,” Scott said during a presentation of the forecast at Crowne Plaza Hotel. “This is a very conservative forecast. If several projects hit, this could be sillingly conservative.”
Louisiana is expected to add 22,700 jobs in 2013, which will bring the number of people working to 1,945,700, a new employment record for the state. An additional 27,500 jobs are set to be added in 2014. Scott and Richardson note that if one or two of the proposed major projects that are being considered come through, the number of jobs in Louisiana could top 2 million by 2014.
Scott said the state has come near the 2 million jobs mark several times, but never hit the mark because of events such as the 9/11 terrorist attacks, hurricanes Katrina and Rita, and the Great Recession.
“Louisiana is doing way better than the national economy,” Scott said.
The state has actually seen the number of jobs increase since 2008.
Seven of the state’s eight metro areas are projected to gain jobs both years. The exception is New Orleans, which will see the closure of the Avondale shipyard in 2013, but then grow jobs in 2014.
The state of Louisiana is projected to see a 2.6 percent increase in the number of jobs from 2012 to 2014. Among metro areas, Lafayette is projected to be the biggest gainer, seeing a 6.9 percent increase in the number of jobs over the two-year period. It is followed by Houma, a 6.2 percent gain; Lake Charles, 5.7 percent; Alexandria, 2.7 percent; Baton Rouge, 2.4 percent; Monroe and Shreveport, each 0.8 percent; and New Orleans, 0.6 percent. Rural parishes are forecast at a 3.1 percent growth rate for the two-year period.
Among the projects announced for Baton Rouge are $700 million in expansions at Dow Chemical plants in Plaquemine and in St. Charles Parish, the $500 million project by Methanex Corp. to relocate an idle methanol plant to Geismar and a $466 million chlor-alkali plant Westlake Chemicals is currently building in Geismar.
The petrochemical growth is caused by the ample supply of cheap natural gas south Louisiana chemical plants can tap into. That has lowered the cost of one of the industry’s primary feedstocks and fuel sources.
The report said Baton Rouge is in the running for more major projects. The Ascension Economic Development Corp. said there are three potential projects being considered, with a value of $12.1 billion and up to 1,000 jobs. The Baton Rouge Area Chamber said there are “five highly” likely projects that could be announced before year’s end that would create 358 jobs and lead to $910 million in spending.
The report projects that Baton Rouge will set a new record for jobs sometime in 2013, breaking figures set in 2008. This comes, despite the potential for more layoffs in state government.
NEW ORLEANS: The impending closure of the Avondale shipyard is expected to take its toll on the New Orleans economy during 2013, when the area will drop 1,400 jobs.
“It is difficult to overcome the loss of 3,700 jobs,” Scott said. But the region is expected to rebound in 2014 and add 4,000 jobs, thanks to more than $10 billion in public works and industrial construction projects.
The backlog of projects, which includes a new $1.06 billion Charity Hospital in New Orleans, a $995 million VA facility and a potential $1 billion expansion of the Marathon Refinery in Garyville, will boost employment in 2014.
New Orleans is also a finalist for five large projects, with code names such as Acme, Hot Brick and Yale. Combined, those projects would represent a $1.8 billion investment in the region, and would create 2,350 jobs. While the study said it is doubtful the city would pull a clean sweep of the projects, just one or two would be a coup that would further improve the future economic forecast.
New Orleans, along with Houma, is also expected to benefit from additional fines and payments BP will make as part of settlements for the Deepwater Horizon disaster.
LAFAYETTE: Over the next two years, metro Lafayette is projected to be the fastest-growing area in the state, with an estimated 5,800 jobs set to be created in 2013 and 5,600 jobs in 2014.
The increased economic activity in Acadiana is being driven by two factors:
- A return by oil companies to the Gulf of Mexico, after the moratorium on drilling following the Deepwater Horizon disaster and strict new federal standards for permits.
- Expansions of Lafayette-based businesses that operate outside the energy sector, such as Schumacher Group, Acadian Ambulance and Stuller Settings.
The report notes that the Lafayette figures are based on U.S. Bureau of Labor Statistics estimates, which Scott has said seem unnaturally high. For the first seven months of 2012, the Acadiana area is estimated to have added 14,000 jobs, a rate that outstrips the growth seen in the oil boom years, like 1981, when 12,000 jobs were created.
Scott has repeatedly questioned the accuracy of the BLS figures, saying that they are based on too small a sample.
SHREVEPORT-BOSSIER: The Shreveport-Bossier region is expected to add 600 jobs in 2013 and 1,000 jobs in 2014. The market will deal with a decline brought on by the recent shutdown of the GM plant and reduced natural gas-drilling activity in the Haynesville Shale. The region will be boosted by new businesses in the Caddo-Bossier Port, such as Ronpak, and the potential for another major new tenant at the facility.
HOUMA: Houma is projected to add 2,800 jobs in 2013 and 3,200 in 2014 as the region sees more drilling activity coming to the Gulf of Mexico and the potential for further BP claim settlements and additional hiring at shipyards.
LAKE CHARLES: Lake Charles will also see significant job gains, due to the chemical boom and industrial construction activity, like the massive $5.6 billion liquefied natural gas export terminal planned by Cheniere Energy. The forecast calls for 2,300 new jobs in 2013 and 2,800 jobs in 2014.
MONROE: Monroe, which snapped an eight-year streak of net job losses in 2011, is projected to add 300 jobs in 2013 and 300 jobs in 2014. The continued growth of companies such as CenturyLink, Chase Mortgage and Graphic Packaging will lead to the new positions.
ALEXANDRIA: Alexandria is projected to add 1,100 new jobs in 2013 and 600 in 2014, thanks to the Sutherland Global business process outsourcing center, the biofuels plant Sundrop Fuels will open and the casino the Jena Band of Choctaws are building.
RURAL: The rural parishes of Louisiana are projected to add 5,700 jobs in 2013 and 6,100 in 2014, as the primarily agricultural area shifts to allow projects like Nucor’s iron production plant in St. James Parish, the Petroplex oil storage facility in St. James and the Jeld-Wen wood-fiber door facings plant in Winn Parish.