The majority of managers at three dozen Baton Rouge area industrial plants say they plan to hold hiring and spending steady over the next six months, according to the latest quarterly survey conducted by the Greater Baton Rouge Industry Alliance.
“The most common issue plant managers cite this quarter includes increases in taxes and regulations, which will affect decisions to expand in Louisiana,” reads the report. “Other issues include low oil prices and impact of traffic.”
GBRIA Executive Director Connie Fabré says the forecast’s survey was conducted prior to Louisiana’s historic flooding earlier this month.
Still, the flooding wouldn’t have impacted the forecast because most industrial facilities ended up with little or no damage, and companies tend to base decisions on capital investment on national and global markets, she says.
If anything, it’s possible that capital investments may increase, says Fabré, adding that taxes and how an area is perceived would have more impact than the recent flooding.
Of the 36 plant managers to participate in the survey, 66% say they don’t anticipate increasing hiring or capital expenditures over the next six months. Some 26% say they expect both to increase, and 9% say they’ll probably see decreases.
“The capital investment outlook, which has seen a decline since the fourth quarter of 2015, has seemed to plateau; members claim to remain on schedule at full production,” the reports says.
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 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 latest GBRIA index is 64, which reflects an expanding economy. The score is up slightly from the second quarter index of 58.
GBRIA represents 60 petrochemical, energy, paper, pharmaceutical, pipeline, storage terminal and other industrial facilities located in the eight-parish Capital Region.
