Despite concerns about the effect of lower oil prices and a shortage of skilled workers in the area, Capital Region plant managers remain optimistic about production, spending and hiring at the plants over the next six months. That’s according to the Greater Baton Rouge Industry Alliance’s latest quarterly survey of its 57 members in the petrochemical, energy, paper, pharmaceutical, pipeline and storage terminal industries across the eight-parish region.
Based on survey responses, GBRIA compiles an index score for the region in its outlook, similar to the index reported by CEOs of The Business Roundtable. The current GBRIA index is 72, which reflects an expanding economy. The index ranges from negative 50 to 150, with any reading above 50 reflecting an expansion of the local economy and any reading below 50 as evidence of economic contraction.
“The investments and growth seen over the last year are holding for the most part although some projects have been delayed due to current oil price drops and labor issues,” says GBRIA, which released the forecast today. “Overall, industrial production and demand remain healthy mainly due to the low price and availability of natural gas and strong consumer demand.”
Of GBRIA’s 57 members, 39 participated in the latest survey. Of them, 38% said they expected to increase plant production in the next six months, while 56% said they expect production to hold steady and 5% said they expect it to decrease. Also, 38% of respondents said they expected capital expenditures to increase, 41% said they expect spending to be flat and 21% said they expect it to fall.
When it comes to hiring employees, 26% said they expect to add workers, 69% said staffing levels will likely remain as they currently are and 5% said they think employment at their plants will fall. At the same time, 26% said they expect contract employment to increase at their plants, while 59% said contract employment will not change and 15% said they expect to have fewer contract employees.
“The top issues plant managers cite this quarter affecting business are lower oil prices, availability and turnover of employees and skilled craftspeople, and area traffic congestion,” GBRIA says.
Earlier this month, GBRIA released a semi-annual forecast that predicted as many as roughly 28,000 contract laborers are expected to be needed in the Baton Rouge area through next summer. Welders, pipefitters, and instrument and electrical technicians will be the most indemand skilled laborers, according to the forecast, which GBRIA also compiles based on surveys with its members.
—Steve Sanoski
