LSU Department of Economics Releases Louisiana Economic Outlook
September 25, 2018
BATON ROUGE – LSU E. J. Ourso College of Business Professor Emeritus of Economics Loren Scott unveiled the 2019-2020 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.
According to Scott, the 37th edition of the LEO, which is published by the college’s Economics & Policy Research Group, shows job growth on the horizon following the state’s recession.
“The Louisiana economy emerged from a 28-month recession in late 2017 that cost our state over 23,000 jobs,” said Scott. “It was odd in that most of the losses were in the oil patch---Lafayette (-21,600 jobs) and Houma (-16,200 jobs) — while the Lake Charles MSA was the fastest growing MSA in the entire country.”
According to the LEO, the state should add 59,500 jobs over 2019-20, surpassing the 2 million-job mark for the first time in its history in 2019. The oil patch is expected to bottom out this year and begin to grow again, especially in 2020 when oil prices are projected to reach about $80 a barrel.
Scott added that the real boost for the economy would come from major industrial expansions along the Calcasieu Ship Channel in the Lake Charles MSA and along the Mississippi River from Baton Rouge to the mouth of the river. Over $170 billion in industrial expansions, a historically remarkable number, have been announced in these areas from 2012-18. Driven by final investment decisions on three huge LNG export facilities, Lake Charles should once again be the fastest growing MSA in the state, averaging 3.8 percent growth a year. Industrial expansions will also drive the Baton Rouge MSA to the second fastest growing MSA in Louisiana (1.7 percent per year over 2019-20).
The state’s largest MSA — the nine-parish New Orleans region — also has several extensive industrial projects underway and a number that should pull the construction trigger over the next two years. The most significant growth will occur on the “edges” of this MSA, in St. James and Plaquemines Parishes, though the Central Business District will get a major boost from the new, 2,000-person DXC Technology Company. This region should add 15,600 jobs, but will still be 34,500 jobs below its pre-Katrina peak.
The LEO shows that the central and northern parts of the state, above I-10, have landed few new projects; consequently, growth rates in this region tend to be more muted. On I-12, the Hammond MSA will feed off the good growth in New Orleans and Baton Rouge and a more settled budget at SLU to generate about 1,600 new jobs over 2019-20.
Scott points to two lingering areas of concern. “The most serious is whether President Trump’s trade initiatives will create a recession-inducing trade war. Secondly, the International Maritime Organization within the UN will require ocean-going ships to use lower sulfur diesel starting Jan. 1, 2020. Will IMO’s directive drive oil prices to $160 and create a worldwide recession? Or will the subsequent oil price increase be much lower and more manageable? There is a lot of uncertainty ahead.”
The LEO is made possible by Gold Sponsors: BlueCross BlueShield of Louisiana, Cleco and Home Bank and Silver Sponsor: ExxonMobil.
Copies of the LEO are available for purchase for $75 by visiting lsu.edu/business/leo or calling 225-578-5211.
About the LSU Economics & Policy Research Group
Based in the E. J. Ourso College of Business at LSU, the Economics & Policy Research Group, or EPRG, is an applied economics research unit of the Department of Economics focused on primary research relevant to Louisiana’s economy. LSU EPRG aims to contribute advances to the general body of economics research, inform public decision making, support economic development and promote a strong, resilient Louisiana economy accessible to all Louisiana residents. For more information, visit our home page.
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Contact: Angela McBride