After a 20-month recession, the good news is the state’s economy is finally recovering. The not-so-good news? Baton Rouge job growth is expected to slow as the industrial construction boom winds down, according to economist Loren Scott, who delivered his annual Louisiana Economic Outlook at Business Report’s Top 100 luncheon today.
The nine-parish Baton Rouge area is projected to gain 2,900 jobs in 2018 and 3,300 jobs in 2019—0.7% and 0.8% growth, respectively. The Capital Region ranks fifth in projected growth among the state’s nine MSAs, behind regions like Lake Charles and New Orleans.
Overall state growth projections are more promising, as Louisiana is poised to add 12,000 jobs in 2018—0.6% growth—and 22,300 jobs in 2019—1.1% growth. If the projections hold true, Louisiana could surpass 2 million jobs in 2019 for the first time on an annual basis in its history.
“The good news is we’re not only coming out of the recession—we’re looking good,” Scott says. “We’re starting to grow again.”
Last year’s Economic Outlook report forecast Baton Rouge would add 4,500 jobs in 2018. But that number fell this year largely due to a slowdown in industrial construction, as roughly $15.7 billion in announced projects are completed or nearing completion, says Scott. Baton Rouge is expected to lose 3,179 construction jobs by the end of 2018. Lake Charles will lose 5,000.
“The growth rate in the Baton Rouge area will drop below 1 percent in next two years,” Scott says. “We’ll need a couple of nice project announcements for our area.”
Offsetting the loss of construction jobs will be activity in the health care sector and the Port of Greater Baton Rouge. Several major projects have been announced in health care, such as Our Lady of the Lake Children’s Hospital and the Provident proton therapy center. Meanwhile, 200 more ships are on track to come into the Port of Greater Baton Rouge, Scott says.
Although oil prices are expected to drift up slightly, the oil and gas industry is still struggling. That means the Lafayette and Houma-Thibodaux areas are in for at least one more year of job losses before they each see moderate 0.8% growth in 2019.
“That’s the bad news: The oil patch has not recovered yet,” Scott says.
The state and local economies could see a boost, however, from a faster-growing national economy, which is projected to expand by 2.5% in 2018 and 2.8% in 2019. Those projections may rise based on whether Congress can pass a successful tax reform plan. Scott says President Donald Trump’s pullback on regulations will also spur economic growth.
But the president’s anti-free trade stance is “very unnerving to me,” he adds. Based on the law of comparative advantage, whenever you raise barriers to trade, the standard of living of all countries drops.
Scott delivered his annual Economic Outlook at the Top 100 Luncheon. The event is part of the Louisiana Business Symposium, which kicked off with a ceremony to unveil the Best Places to Work in Baton Rouge.
—Annie Ourso Landry