As uncertainty permeates the oil and gas markets, perhaps through 2016, some industry leaders hope that layoffs in that sector will conversely ease the skilled labor shortage dogging Louisiana’s construction industry.
As 10/12 Industry Report details in a feature from its quarterly issue, many of these out-of-work laborers are expected to transition to construction, prompting Louisiana Associated Builders and Contractors and others to ramp up training efforts.
“It’s a huge opportunity; we just have to shift and step up our training,” said Andy Dupuy, CEO of Brown & Root Industrial Services in Baton Rouge. Dupuy was one of several industry executives who spoke in November at the South Louisiana Construction Economic Forum, hosted by the Louisiana Construction Financial Management Association and ABC.
Economist Anirban Basu, a guest speaker at the forum, also views the oil and gas downturn as an opportunity.
“A lot of workers on oil and natural gas projects have been dislocated,” Basu, of Baltimore’s Sage Policy Group Inc., said. “These [workers] will eventually transition into other areas that are adding jobs, primarily construction.”
This would come in the nick of time, as contractors ramp up efforts to find more skilled laborers to support a profusion of industrial projects in south Louisiana. The Baton Rouge area announced more than $60 billion in new industrial projects in 2015, while the New Orleans area anticipates $13.6 billion in new projects.
“There’s a lot of work coming Louisiana’s way,” Basu said. “Some of those projects will get the green light and some will not, but by this time next year I’m certain we’ll be talking about significant construction job growth.”
Baton Rouge construction jobs grew more steadily than New Orleans in 2015, given that it had more projects entering the construction phase.
Of course, a sustained drop in oil prices is not all good news for construction. The combination of lower oil prices and a strong U.S. dollar in 2015 has created an unhealthy economic environment for the chemical industry, said Dan Borné, president of the Louisiana Chemical Association. This, in turn, will impact contractors working in that sector.
“When oil is low and the value of the dollar is strong, it impacts Louisiana’s exports and therefore affects everybody in this room,” Borné added. “A sustained, long deflation in the price of oil makes the raw material for our competitors in Europe more economical.”
Read the full feature. Check out the full lineup of stories from the new quarterly issue of 10/12 Industry Report. Send feedback, story ideas and company news to editor@1012industryreport.com.
