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Unless you were here 25 years ago, you can’t appreciate how bad it was to be in business in Baton Rouge. From 1982-87, Louisiana went through the worst recession in its recorded history. Plunging oil prices sent extraction employment from 102,000 to less than 50,000. Mix a serious national recession with the skyrocketing exchange value of the dollar and high natural gas prices, and you got a chemical industry in the tank, shedding a third of its high-wage jobs.

All total, more than 148,000 jobs—9% of the Louisiana work force vanished. Things were so bad, people were slipping into Mexico looking for work. Even people who couldn’t pay quit ordering stuff.

It wasn’t quite that bad in the Baton Rouge metro area, but it wasn’t pretty (see chart, Phase I). From 1982-87, area employment declined in four of those six years. Our toughest two years were 1986-87, when employment dropped by 4,800.

The highest concentration of chemical industries in the state is here. Falling oil prices meant falling severance taxes, which meant a state budget that was sucking wind. Two of our biggest employers—LSU and Southern University—went through repeated mid-year budget cuts.

The federal government compounded problems by passing the Tax Reform Act of 1986, which sent the real estate industry into the tank. The only hot selling item in Baton Rouge was for sale signs. There was one in front of every third house in my old Oak Hills subdivision. Condos built at $135,000 in 1985 were being sold two years later by the FDIC for $35,000.

Face it, folks. Economically, it was a pigpen when Business Report was born in 1982.

The turnaround began in 1988 (Phase II), and for the next 13 years Baton Rouge was typically the fastest growing Metropolitan Statistical Area (MSA) in the state, adding a robust average of 7,500 jobs each time the calendar turned. (The unusual spike in 1990 was caused by the addition of five parishes to the MSA.)

Not only was the national economy doing well, but the exchange value of the dollar plunged, making our chemicals really cheap to foreigners. Massive expansions took place at BASF, ExxonMobil, Shell, Dow and others, which in turn kept the throttle wide open at the area’s industrial construction firms. A real sleeper—Pennington Biomedical Research Center—began adding a punch to the region’s economy.

The tables turned decidedly against Baton Rouge over the next four years (Phase III). We gained only 2,900 jobs, a paltry 750 a year, from 2001-04. Our vital chemical sector was the problem. Initially, the national recession hit sales in this sector very hard and weakened considerably the price of chemical products.

There was a second, more problematic, bug in the punch bowl. High natural gas prices radically raised operating costs for these firms. Several chemical firms in the region announced layoffs or closed temporarily, partially or completely. Industrial construction firms began shedding employees as maintenance/repair work was delayed and new capital projects came to a standstill.

To paraphrase an old saying, “One man’s disaster is another man’s boom.” There’s a curious thing about natural disasters. If you live right next to them, you may make out like a bandit. Enter the prosperous Phase IV period.

By far, the most striking event in the life of Business Report was Hurricane Katrina in August 2005. Almost a quarter of a million evacuees invaded the MSA overnight. Supplies vanished from grocery stores, you could not get into a restaurant and every rental unit in the area was gobbled up. The traffic count at the split of interstates 10 and 12 jumped 22%. Traffic was so bad that drivers totally stopped using their cell phones—both hands were needed for gesturing.

Of course, there was no way for the region to permanently absorb that many new people. Many evacuees either returned to New Orleans or moved to other locations in- and out-of-state. Still, the census count for 2006 showed the Baton Rouge MSA population settling in at plus-35,192, about half a decade’s worth of population growth virtually overnight. That same 2006 census count showed East Baton Rouge Parish was only 2,288 persons smaller than the most populous parish in the state, Jefferson Parish.

At the same time, the Katrina effect was working its way through the economy, the chemical industry finally came to terms with higher natural gas prices and started to expand again, led by the $1.9 billion Shintech project. In the first two years after Katrina, employment in the area jumped by 21,300 jobs. That’s about 3.1% a year, even faster than the heady years of Phase II.

Growth will most certainly remain strong going forward, led by a construction sector that is rising flat off the charts. A remarkable $5 billion-plus in construction projects is either under way or planned in the Baton Rouge area over the next two years. Direct General is bringing in 2,000 new call center jobs, and Staples will be adding another 400. If the financing is secured for the proposed $5 billion Ligfuels plant in Ascension Parish and the $1 billion expansion of Big Cajun II, we will enjoy an even greater employment spike over the next few years.

Today, it’s a penthouse economy—a wild trip from the pigpen economy when Business Report was born.