The dreaded “R” word is in Loren Scott’s 27th Louisiana Economic Outlook, although he says it should be “a relatively shallow national recession lasting about one year.” Scott presented the report at the BizTech Expo's Top 100 Luncheon on Wednesday.
He expects that Louisiana will have near level job growth next year and gain 28,400 jobs in 2010. “It looks like we’ll be lucky and get through this recession without losing jobs, but it’ll be a close call,” Scott says. “We want to emphasize there is a high level of uncertainty this year in the forecast because we’ve never dealt with a recession with a credit freeze behind it.”
In light of the unprecedented events in financial markets and the credit freeze, Scott says his team of LSU economists, which includes James Richardson and Dek Terrell, pared by one-third their initial forecasts in statewide growth. One of the reasons, he says, is declining personal wealth, which will hurt consumer confidence and buying.
Louisiana avoided problems in the housing crisis because state’s banking industry didn’t get into the subprime loans that helped stall bank-to-bank lending. “I haven’t found anyone yet who couldn’t get a loan.” Also, housing prices didn’t get artificially high in the state, so the housing bubble didn’t burst as it did in states like California, Florida and Nevada.
Scott also forecast oil prices will stay around $80 to $100 a barrel, which will fuel continued growth in the state.
According to Scott’s metro area projections:
—The Baton Rouge area’s planned $6.5 billion in new construction promises 2,400 jobs next year and 6,800 in 2010. “It won’t be great growth, but at least it’ll be growth.” Scott says the economists remain confident most of this work is on track while some of it could get postponed because the credit freeze. He also says the addition of permanent jobs such as Shaw adding 150 jobs a year for 10 years is another key factor to the area’s continued growth.
—The New Orleans area will be hardest hit with 3,000 jobs lost next year. It will gain 6,000 jobs in 2010.
—The Shreveport-Bossier area will lose 2,100 jobs in durable goods manufacturing next year but gain 2,500 jobs in 2010. He says, however, Louisiana overall is limited in durable goods manufacturing so the job loss will be mostly limited to the this area.
—Higher energy prices will keep Houma and Lafayette growing. They are expected to gain 1,800 to 2,800 jobs next year and 2,400 to 3,200 jobs in 2010.
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