Economic Outlook Louisiana and Baton Rouge AMERICAN COUNCIL
Economic Outlook Louisiana and Baton Rouge AMERICAN COUNCIL OF ENGINEERING COMPANIES OF LOUISIANA. PREPARED BY DR. JIM RICHARDSON ALUMNI PROFESSOR OF ECONOMICS LOUISIANA STATE UNIVERSITY
Looking at Louisiana’s Past �We divide the past 40 plus years into decades and then smaller time dimensions � 1970 s---oil, and more oil—a boom for Louisiana � 1980 s—every boom has a bust � 1990 s—a ten year expansion nationally and locally �The 2000 s—must be divided into several time dimensions From 2000 to 2008—nationally very marginal growth; Louisiana had its Katrina/Rita and then the recovery 2008 -2010—the financial meltdown 2010 through 2013, the recovery
Historical Perspective: State Employment Changes Per Year 60, 000 50, 000 49, 700 40, 000 33, 000 30, 000 22, 100 20, 000 10, 000 2, 500 -40, 000 01 3 0 20 20 08 -2 10 -2 01 8 00 -2 19 9 0 s 00 -4, 800 20 -30, 000 19 80 s -20, 000 19 7 -10, 000 0 s 0 -26, 500
Historical Perspective MSA Employment Gains or Losses Per Year MSAs/Rural Parishes (RLMA) Alexandria 1990 s 2000 -2008 -2010 -2013 1, 005 870 -1, 790 -260 8, 020 4, 450 -5, 620 6, 880 (RLMA 3) 1, 990 2, 460 -2, 500 2, 380 Lafayette (RLMA 4) 3, 560 2, 500 -2, 140 3, 930 Lake Charles (RLMA 1, 530 750 -3, 010 1, 290 Monroe (RLMA 8) 1, 690 80 -1, 170 710 New Orleans (RLMA 8, 610 -11, 300 -3, 170 7, 420 (RLMA 7) 3, 480 1, 220 -1, 970 -1, 320 Rural Parishes 3, 080 1, 440 -5, 040 1, 060 State 33, 000 2, 470 -26, 400 22, 100 (RLMA 6) Baton Rouge (RLMA 2) Houma-Thibodaux 5) 1) Shreveport-Bossier
Making Projections SHORT-TERM PROJECTIONS ARE THERE TEN YEAR PROJECTIONS?
Louisiana Economic Outlook, 2014 -2016 MSA 2014 2015 2016 Louisiana 1, 971, 400 2, 005, 500 2, 038, 100 Alexandria 62, 500 63, 000 63, 400 Baton Rouge 394, 000 403, 200 413, 500 Houma/ Thibodaux 101, 500 104, 000 106, 000 Lafayette 161, 000 166, 000 168, 700 Lake Charles 95, 000 99, 000 104, 000 Monroe 78, 800 79, 400 80, 000 New Orleans 553, 000 561, 500 570, 000 Shreveport/ Bossier 171, 500 173, 000 173, 500 Rural Parishes 351, 000 354, 000 355, 000 Baton Rouge and New Orleans over half of growth
Long-term Employment Projections, LED/LWC (includes Sole Proprietors) State/Regional Labor Market 2012 2022 Average Annual Growth Rate State 2, 000 2, 260, 000 1. 3% Alexandria 115, 280 127, 390 1. 1% Baton Rouge 445, 150 513, 760 1. 5% Houma-Thibodaux 105, 000 122, 840 1. 7% Lafayette 291, 070 330, 170 1. 3% Lake Charles 121, 390 142, 700 1. 8% Monroe 116, 770 128, 850 1. 0% New Orleans 562, 360 620, 950 1. 0% Shreveport-Bossier 247, 820 277, 630 1. 2% Forecasts Generated by LED, LWC, and LSU Division of Economic Research with knowledge of activities in Baton Rouge and Lake Charles
Forecast of National Economy, % Change in Gross Domestic Product
Price of Oil Forecast
Change in Oil Production
Shale Plays in Lower 48
Tuscaloosa Marine Shale
Estimates of Price of Natural Gas
Natural Gas Forecasts �Price of Natural Gas Remains relatively low—abundance of natural gas �World Prices do not converge to 2005/2008 status 2005, price of natural gas in Germany, Japan, and U. S. we approximately $6 per thousand cubic feet (MCF) Today, price of natural gas in Japan (almost $18 per mcf), in Germany (almost $12 per mcf), and in the U. S. ($4 per mcf) �Price of natural gas remains much lower relatively than price of oil Normal ratio, based on btus, price of oil about 6 times price of natural gas. Presently, it is $80 per barrel of oil to $4 per mcf of natural gas or price of oil is about 20 times the price of natural gas
Employment Changes in BR Area 6. 0% 5. 0% 4. 0% 3. 0% 2. 0% RLMA 1. 0% 3 Parishes EBR 0. 0% 2001 -1. 0% -2. 0% -3. 0% -4. 0% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Factors in Baton Rouge Area Future �Major Investments in Petrochemical industry Dow is pursuing a $1. 06 billion investment BASF is building $350 plant addition CF Industries spending $2. 1 billion Shintech, $500 million in expansion Methanex Corporation, $1. 1 billion investment Plus almost $10 billion in “plans” for investment in the Baton Rouge area �IBM �Ameritas’
Baton Rouge Forecast, 2015 -2016
Construction Employment for Louisiana
Louisiana Forecasts, 2015 -2016
Economic Outlook Louisiana and Baton Rouge AMERICAN COUNCIL OF ENGINEERING COMPANIES OF LOUISIANA PREPARED BY DR. JIM RICHARDSON ALUMNI PROFESSOR OF ECONOMICS LOUISIANA STATE UNIVERSITY .
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