With 5,700 new jobs projected for 2020 and another 6,000 anticipated for 2021, the petrochemical-dependent Baton Rouge metro area should escape a “lull” in economic growth over the next two years, fueled by a series of announced large-scale private industrial and public construction projects.
That’s according to economist Loren Scott, who delivered his annual Louisiana Economic Outlook as the keynote speaker of Business Report’s Top 100 Luncheon this afternoon, which honors the Top 100 Private Companies in the Capital Region.
Scott attributes Baton Rouge’s several-year lull to multiple factors, including residual effects from the 2016 floods, Georgia-Pacific’s 700-job layoff, and Thompson Pipe moving to Texas.
“There is industrial construction recovery ahead,” Scott said during his keynote.
Some “unusually large public construction projects” should spark the local economy, says Scott, such as planned projects for flood mitigation (totaling $2.9 billion), the MovEBR program ($1.1 billion) and widening Interstate 10 from the Mississippi River Bridge to the I-10/I-12 split ($360 million in GARVEE bonds).
Meanwhile, the Capital Region also has several major private industrial projects coming down the pipeline, such as Shintech, which recently announced a $1.49 billion expansion of its PVC facility that will generate 120 new permanent jobs; Methanex, which is constructing a $1.4 billion, third methanol unit that will employ 25 people; and Shell Chemical, which is expected to pull the trigger on a $1.2 billion mono-ethylene glycol unit in the first half of 2020.
Of the $16.8 billion worth of industrial projects announced in the Capital Region since 2012, some $11.5 billion—roughly 69%—are completed or underway, as the region eyes another $5.2 billion worth of potential investments in the coming years.
Scott’s employment projections put Baton Rouge fifth among the state’s nine metros in terms of percentage growth, trailing Lake Charles, New Orleans, Houma and Lafayette—a reflection, says Scott, of “unusually strong recoveries” in New Orleans and Lake Charles, which have “more and bigger construction projects ahead,” as well as a “nice recovery from the previously deep-recession oil patch metro areas.” In absolute growth, however, Baton Rouge ranks second, behind only New Orleans.
Statewide, Scott’s forecast that Louisiana will add 24,700 jobs (+1.2%) in 2020—which, if accurate, would mark the first time in history that state employment surpasses 2 million jobs on an annual basis—hinges largely on two factors: 1) whether the tariff issue with China is resolved before the 2020 national elections, boosting the national economy, and 2) whether 10 new rigs will begin operations in the Gulf of Mexico by 2021. Scott is optimistic both will happen.
