Fueled by a heavy industrial and petrochemical boom, the nine-parish Baton Rouge metro area is projected to add 21,700 new jobs over the next two years, according to the 2014-15 Louisiana Economic Outlook released by Loren Scott at Business Report‘s Top 100 Luncheon this afternoon.
That represents a 5.6% increase to the Capital Region’s current total of 381,500 jobs and a near doubling of the next-best net job growth forecast among Louisiana’s eight metro areas.
“The authors have been monitoring the Baton Rouge economy for 40 years. We have never seen an industrial expansion like the one underway in [the Capital Region],” reads the report. “What is equally exciting are some of the significant non-industrial expansions announced for the region. It is difficult to temper one’s optimism about the future for the [region].”
Specifically, the forecast calls for the Capital Region to add 12,500 jobs next year and another 9,200 in 2015.
“The very strong projected performance for the Baton Rouge MSA can be heavily traced to the boom in the area’s chemical industry,” reads the report, which Scott and other local economists, including Jim Richardson, have been compiling for 32 years now. “The Greater Baton Rouge Industry Alliance has tabulated a remarkable $23.7 billion in announced or underway projects. In last year’s [Louisiana Economic Outlook] that number stood at what we thought then was an amazing $4.1 billion in projects.”
The good news in the economic forecast for the next two years is not limited to the Capital Region. In fact, for the first time in at least six years, job growth is forecast through the next two years in all eight Louisiana metro areas—Baton Rouge (5.6%), New Orleans (2%), Lafayette (2.6%), Shreveport-Bossier (1%), Houma (5.3%), Lake Charles (8.1%), Monroe (0.6%) and Alexandria (1.1%).
“In a real break from the past, the rural area of Louisiana will be a great source of new jobs over 2014-15,” the report notes, “growing by about 2% a year.”
Overall, Louisiana is expected to surpass the 2 million employment mark sometime in 2015 for the first time in the state’s history, the report says, noting the state is currently one of just 12 with more people employed today than at the outset of 2008. But the report also observes:
“We cast a wary eye toward three key issues in Louisiana’s future: (1) how much money will be pumped into our economy via BP payments, (2) will the new National Flood Insurance Program be restrained or fully implemented, and (3) what will be the impact of the sequester and other cuts to the Defense Department budget on Louisiana’s substantial military presence?”
In the Capital Region, however, another problem looms. The job growth over the next two years is expected to create a worker shortage. And though the report calls it a “happy” problem, it also notes it could be a major challenge.
“Between July 2013 and September 2014 the demand for contract workers will jump from 17,500 to 31,000, a whopping 77% increase in just over a year,” the report says, citing figures from a recent GBRIA survey. “This means business will be especially strong for major industrial contractors in the area such as Turner Industries, Performance Contractors, CB&I, Cajun Contractors and the Newtron Group. Finding these people and housing them will be a great challenge over the next couple years.”
