Scott: Economic outlook ‘positive’ for Baton Rouge

Despite bleak news for the economy both nationally and statewide, the Baton Rouge area holds some good data, LSU economist Loren Scott says. “We have a very positive future,” Scott told those at Business Report‘s Top 100 Private Companies Luncheon this afternoon at the Crowne Plaza. Scott presented the 2012-13 “Louisiana Economic Outlook” report, which he co-authored with LSU economics professor Jim Richardson. According to the report, the Baton Rouge Metropolitan Statistical Area is expected to see a net growth of 4,400 (1.2%) jobs in 2012 and 3,300 (0.9%) in 2013. Though relatively flat, it’s better than the state overall, which the economists expect will see a 0.8% growth rate for each of the next two years. The Baton Rouge MSA comprises a nine-parish area including East Baton Rouge, West Baton Rouge, Livingston, Ascension, Iberville, St. Helena, Pointe Coupee, East Feliciana and West Feliciana parishes. The report estimates there are 363,400 non-farm jobs in the area, second only to New Orleans. Of the state’s eight MSAs, Scott says, the Baton Rouge area was “the second-least hit by the recession.” The report says strong activity in the petrochemical industry has created significant construction projects, particularly an increase in “turnarounds” at chemical plants. He notes several plant expansions are ahead in Baton Rouge, including Westlake Chemicals, Georgia Pacific, Honeywell and Formosa Plastics. Scott credits the success of the chemical industry to numerous factors, including the uptick in natural gas use. “We use it a lot,” he says. “The price of natural gas has come down a lot … and there are shale plays all over the place.” He cites the promise of the Tuscaloosa Marine Shale, which cuts a wide swath across central Louisiana and could one day prove to be as lucrative as the Haynesville Shale in northwest Louisiana. “Fracking could totally change our oil picture in the country,” Scott says. However, he also notes the offshore drilling moratorium and the recession have hurt the state. Additionally, state government cutbacks led to layoffs of about 1,300 workers this year. Scott says state employment is a source of concern, given that uncertainty over Medicaid funds “is a really tricky thing for us. We’re worried about it.” Nonetheless, Scott forecasts the area will weather its challenges. “If you’re to be located in a place, this is one of the best places to be located,” he says.