2020-21 Louisiana Economic Outlook Released
September 24, 2019
BATON ROUGE - LSU E. J. Ourso College of Business Professor Emeritus of Economics Loren Scott unveiled the 2020-21 Louisiana Economic Outlook (LEO) at The Greater Baton Rouge Business Report’s annual Top 100 Luncheon. The event, held this afternoon at the Crowne Plaza, is part of the Louisiana Business Symposium.
The LEO is made possible by Gold Sponsors: BlueCross BlueShield of Louisiana, Cleco, Entergy and Home Bank. In addition to Scott, Greg Upton, assistant professor-research at the Center for Energy Studies, also contributed to the LEO.
According to Scott, the 38th edition of the LEO, which is published by the college’s economics department, shows job growth picking up over the next two years after a slow period in 2018-19. Growth in the state has been held back recently by weak activity in the Gulf of Mexico and an industrial construction “lull” between the building of some very large projects.
“Louisiana has enjoyed a remarkable $188 billion-plus in industrial announcements since 2012. Of that number, about 40 percent have been completed or are underway. In 2019, the state has been in a lull between finishing some projects and starting up new ones. Many of the latter should begin construction over 2020-21, giving a real boost to the Lake Charles, New Orleans and Baton Rouge economies.”
According to the LEO, the state should add 53,800 jobs over 2020-21, surpassing the 2 million-job mark annually for the first time in its history. Two very important assumptions are behind this forecast: the tariff issue with China is expected to be resolved well before the 2020 national elections, giving the national economy an extra boost; and an additional 10 new rigs will begin operations in the Gulf of Mexico by 2021.
The additional rigs in the Gulf will bring the Houma Metropolitan Statistical Area (MSA) out of the doldrums and will add a bump to the Lafayette MSA. Key non-oil-related companies in Lafayette are also doing well, generating 7,200 new jobs for that MSA over 2020-21.
An end to the lull in industrial construction will bring new jobs to the New Orleans MSA----especially to regions on the eastern and western edges. A projected 19,500 new jobs are estimated for the largest MSA in the state. Lake Charles will also benefit from renewed industrial construction activity as at least two, and possibly three, LNG export terminals begin building. Some 6,800 new jobs are forecast for Lake Charles, making it the fastest-growing MSA in the state. A third region benefiting from the end of the lull will be the Baton Rouge MSA, estimated to gain 11,700 jobs over the next two years, as some large industrial projects startup and the Port continues its rapid expansion.
The news is not quite so happy for the area of the state above I-10, where most areas peaked as far back as 2008. The Shreveport MSA should pick up a modest 600 jobs due to expansions of the Port of Caddo-Bossier and the National Cyber Research Park. Alexandria’s major employers are stable but, to generate growth, they will need a large new tenant at the old IP site and much more drilling activity in the Austin Chalk. Monroe MSA has been weak the past three years and lies below its peak level achieved back in 2002. Some boost from Vantage Health should help add 400 jobs over the next two years
Copies of the LEO are available for purchase for $75 by visiting lsu.edu/business/leo or calling 225-578-5211.
Department of Economics
E. J. Ourso College of Business