After enjoying three years of solid job growth, the Baton Rouge area economy began to slow in 2018 as the industrial construction boom, which stimulated area growth for years, winded down.
But the lull is not here to stay. This year, the Capital Region is expected to kick back into high gear, propped up once again by renewed activity in the industrial sector, which will contribute to the addition of some 6,000 new jobs next year, at a growth rate of 1.5%, according to economist Loren Scott’s annual Louisiana Economic Outlook report.
And it continues to get better. Another 8,100 new jobs are projected for 2020 in the Baton Rouge area, at a growth rate of nearly 2%, according to the report.
That’s a total of 14,100 jobs coming to the Capital Region over the next two years, which is the most positive economic outlook for the metro area in recent years. The forecast is notably better than last year’s, which initially predicted just 3,300 new jobs in 2019.
Six major projects under construction in the nine-parish region are expected to drive the majority of the growth. Among the biggest are Shintech’s $1.4 billion ethane cracker project in Plaquemine, Shell’s $717 million alpha olefins plant in Geismar, Oxychem’s $145 million expansion in Geismar and BASF’s $150 million expansion in Ascension Parish.
Whether the uptick in job growth continues, however, depends of other potential projects still in the planning phase. Of the nearly $19 billion worth of industrial projects announced in the Capital Region since 2012, $15.8 billion have been completed or are underway. Another $3.1 billion of potential investments are possible in coming years.
Among those is ExxonMobil’s proposed polyolefins plant expansion, worth up to $1 billion. Baton Rouge is in the running as the potential site for the project, which would bring 65 new permanent jobs to the area. The project already received approval for industrial tax exemptions, and Exxon is expected to announce its decision early next year.
Major medical facility investments have also contributed to Baton Rouge’s economic growth, including Our Lady of the Lake Children’s Hospital and the new $100 million Ochsner complex, which are both expected to open this year. A growing tech sector and several massive road construction projects in the area are expected to contribute significantly to job growth as well, according to Scott’s report.
Statewide, the outlook notes that “after a 28-month recession that cost Louisiana over 23,000 jobs, the state’s economy began to grow again in 2018.” The state is forecast to add 23,400 jobs in 2019, at a growth rate of 1.2%. Another 36,100 jobs are forecasted for 2020, at a 1.8% growth rate.
The Baton Rouge metro area will see the second-highest economic growth in the state in percentage growth, behind Lake Charles, and absolute growth, behind New Orleans.
Statewide projections depend in part on oil prices and the continuing expansion of the national economy, Scott says. Low natural gas prices, in particular, have fueled industrial expansions in Louisiana in recent years and should continue to decline. On the other hand, threats such as the Trump administration’s ongoing tariff dispute with China could prove detrimental to a Louisiana economy dependent on foreign trade.