Defining the Capital Region

Defining the Capital Region

A look at what makes this south Louisiana hub thrive.


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Baton Rouge” means “red stick.” It's French, but visitors and new arrivals shouldn't feel obligated to pronounce it that way. No one else does.



When locals say “Baton Rouge,” they're often talking about East Baton Rouge Parish; unless you happen to know where the lines are drawn, it's hard to tell where the sprawling city begins and ends. But for economic development purposes, it's perhaps most instructive to pull back and look at the entire region.



Not everyone defines the Capital Region the same way. But the term most commonly refers to east and west Baton Rouge parishes and the seven contiguous parishes that surround those two. As the center for business, state government and higher education, Baton Rouge is the hub, while Ascension and Livingston parishes, along with the young cities of Central and Zachary, compete to see who can be the fastest-growing bedroom community.



According to the 2010 census, the Capital Region has surpassed the 800,000-resident threshold to reach “major market” status. Along with growth come growing pains, and the Baton Rouge area faces challenges dealing with crime, education and infrastructure, among other issues. But while Baton Rouge still feels like a small town in many respects, civic leaders hope the city is poised to become one of the South's leading lights.



Economic base

In terms of the sheer number of jobs, health care, retail and education are the Baton Rouge area's leading employers. New growth areas include film production and digital media.




But arguably the three most important sectors of the economy are government, industrial construction, and manufacturing, particularly chemical be relatively stable, providing a base for the rest of the economy. Manufacturing pays the highest average wages in the region.



Many of the region's manufacturers are found along the Mississippi River, particularly in Ascension Parish, and in north Baton Rouge. The companies that own the major plants, such as Dow, BASF and Exxon, tend to be international companies based elsewhere.



However, the plants provide work for a host of homegrown companies. Economist Loren Scott estimates that about one of every 11 jobs in East Baton Rouge Parish could be traced back to ExxonMobil's local refinery/chemical plant complex. Locally owned industrial builders, such as Turner Industries, Performance Contractors and The Shaw Group, are some of the state's most important wealth creators.



“A lot of [industrial construction firms] started right here in Baton Rouge and have really grown up,” says Connie Fabre, executive director of the Greater Baton Rouge Industry Alliance.



The regional economy's stable base, and the fact that no one industry sector provides more than 13% of the region's jobs, helps explain why the Baton Rouge area survived the recession in relatively decent shape. The region appears not to have experienced a massive housing bubble, although the real estate market has been sluggish since the end of the temporary population explosion that followed 2005's Hurricane Katrina.




In February, the Baton Rouge metropolitan statistical area posted an unemployment rate of 7.1%, versus a national rate of 8.7%. It was the 21st consecutive month the private sector added jobs, although public sector losses have offset much of that growth. The total number of jobs in the region was up in 2011 for the first time in two years.



Adam Knapp, CEO of the Baton Rouge Area Chamber, which represents the entire Capital Region, says economic development activity has been brisk, and the results are starting to show up in the job numbers.



HOW THE CAPITAL REGION STACKS UP

#1
Best mid-sized metro area for new and expanded corporate facilities [2012, 2011]
Site Selection Magazine

#1
Mid-markets of the decade
Southern Business & Development

#5
Strongest job markets [2011]
Manpower

Top 5
Great cities for young adults
Kiplinger

#7
Best cities for jobs [2011]
Forbes

#10
Top cities for young adults
Business Journal

#14
Small business vitality
Business Journal

Top 100
Places to live [2011]
Relocate America

SOURCE: Baton Rouge Area Chamber

“We've not had as big a downturn as others,” he says, “which we've always said puts us in a great position for growth again on the other side of the recession. That's where we believe we are now.”



And while few local employers say business is booming—oftentimes, they blame the national economy for dragging us down—leaders in the industrial sectors are more optimistic than they've been in years.



Natural gas is the most important fuel and feedstock for the region's chemical plants. When prices are high, the plants are less competitive internationally, and the area's entire economy suffers.



But lately, thanks to advances in the horizontal drilling technique known as hydraulic fracturing or “fracking,” natural gas is cheap and plentiful. Units that had been mothballed for years are being fired up again, and billions of dollars' worth of new projects could be on the horizon.



Perhaps the most intriguing local business story to watch will be the potential development of the Tuscaloosa Marine Shale, an underground rock formation that crosses the state north of Baton Rouge and may hold seven billion barrels of oil or more. While it remains to be seen if the play will be commercially viable, early reports have been positive.



Quality of life

If Baton Rouge is in fact an overgrown small town, that can be seen as a good and a bad thing. Locals often say they love the tight-knit family atmosphere, while new arrivals say they can feel like outsiders and have trouble settling in. The city has more social and entertainment options than ever before—a new casino entertainment complex called L'Auberge Baton Rouge is slated to open later this year—but is saddled with severe transportation problems stemming from decades of poor planning.



And like most, if not all, American cities its size, Baton Rouge struggles with underperforming urban schools, large swaths of severe poverty, and crime. While many people find what they consider better schools and a quieter lifestyle in the surrounding areas, the overall health of the region is intrinsically tied to its most important city.



But the city and region certainly have their share of assets, some of which are detailed in the special section you're reading now, and there are plenty of reasons to expect significant economic growth in the near future. Baton Rouge, for better or worse, isn't a sleepy little college town anymore, and there's no going back.



“I think the mentality of Baton Rouge has been shifting for a decade,” Knapp says. “It has been shifting household by household, business by business. It's no longer the small town that it was in days past. It is a major market. It is as simple as that.”



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