Region ID’ed as leading state employment

One year ago Loren Scott was cautious about Louisiana’s economic activity following a long national recession. He predicted modest growth with recovery levels less than 1 percent for 2012-13.

This year, the nationally renowned economist and retired LSU professor has much more optimistic expectations.

Speaking before a packed house Thursday at the Cypress Columns, Scott delivered his annual Louisiana Economic Outlook for 2013-2014. His thesis was that the Houma-Thibodaux region is expected to add approximately 6,000 jobs during the next two years and mark itself as Louisiana’s second-fastest growing area – after Lafayette – with a return of activity in the petroleum industry and boost for support services.

“Our forecast is for oil prices to average $95 a barrel over the next two years, within a wide range of $80 to $110 a barrel,” Scott said in his report and admitted that pricing was the same that has been experienced during 2012.

Natural gas prices are predicted to increase from current levels of $2.25 per mmbtu to as high as $3 per mmbtu in 2014.

What is different for the new projected timeline in the Houma-Thibodaux Metropolitan Statistical Area is an expected shot-in-the-arm due to increased oil production in the Gulf of Mexico. This is bolstered by anticipated revenue resulting from yet-to-be finalized fines against BP in connection to the April 2012 Deepwater Horizon disaster.

“We expect this MSA to get a boost from further BP claims and major hiring at its shipyards,” Scott said. “We are projecting 2,800 jobs [a 2.9 percent increase] in 2013 and 3,200 jobs [a 3.2 percent increase] in 2014, for Houma,” the economist said.

If Scott’s projections are correct, the 3.05 percent average employment increase for those two years would set a hiring record in Terrebonne Parish.

On the downside, Scott anticipates layoffs in 2013 among area fabricators as they face a lull in orders carried over from the so-called federally-imposed permitatorium.

Lafayette is the only MSA Scott listed as topping Houma-Thibodaux for actual jobs anticipated in his report. That region is expected to see job growth at a rate of 11,400 positions during 2013-14. That represents an employment change of 3.4 percent for the two years. Exploration and oilfield servicing are behind the anticipated improvement for Lafayette as well as Houma-Thibodaux.

Louisiana has eight MSAs and 35 areas designated as rural parishes. Each region has unique economic conditions. The two MSAs expected to struggle during 2013-14 are New Orleans and the Shreveport-Boisser area.

New Orleans boasts having sold a $10 billion construction list, and has seen reopening activity that demonstrates continued recovery from Hurricane Katrina in 2005.

However, according to Scott, the state’s largest metropolitan area is in the middle of a three-year closure of the Avondale Shipyard. This means another 2,000 people will lose jobs on that site while overall New Orleans’ unemployment is expected to increase by another 1,400 during 2013. On the other hand, Scott expects a rebound in 2014 with the addition that year of 4,000 jobs for a modest net gain of 600 openings.

Shreveport-Boisser is the second MSA expected to struggle during 2013-14. In that area, Scott said closure of a GM plant and declined activity in Haynesville shale exploration are contributing factors. A new casino being constructed and other business activity is anticipated to create 1,600 jobs during a two year period.

Projected employment activity in other MSAs for 2013-14 include an average two-year improvement of 1.35 percent in Alexandria, 1.25 percent in Baton Rouge, 2.85 percent in Lake Charles, but only 0.4 percent for Monroe.

Rural parish employment, including St. Mary Parish, offers a two-year average of 1.55 percent in predicted job growth.

Scott said by averaging activity in all the state’s regions, then anticipating inflation to hold steady at 2 percent, Louisiana has positive potential for 2013-14.

Responses among attendees were appreciative of Scott’s positive predictions, but cautious regarding concerns not specifically addressed during his presentation.

“It’s scary in a lot of respects, but encouraging in others,” Terrebonne Economic Development Authority CEO Steve Vassallo said. “Loren’s comments focused on the reason we are doing so much better than the nation and the state is because of so many natural resources, specifically oil and gas. Our challenge is to continue to not be reliant on any one industry. Thank goodness we have some diversity in Terrebonne Parish. We’ve got to continue to build on that diversity.”

“I was happy to hear in his presentation that the outlook for Terrebonne Parish is as rosy as [Scott] presented it,” Terrebonne Parish President Michel Claudet said. “I’m disappointed that there is a delay in construction activity as a result of the [offshore drilling] moratorium. That is probably the only reason we are not No. 1 in the state. We have a number of positive things happening in Terrebonne. We want it to continue, but let’s just hope and pray that the cuts [in services and 245 jobs] at [Leonard J.] Chabert Medical Center will not adversely affect the predictions he has given us.”

“A positive thing to look toward is the widening of the Panama Canal, because this will ultimately help Terrebonne Parish [with increased shipping activity],” Vassallo said. “Living in Terrebonne Parish is one of the bright spots in the country and will continue to be for the next many years.”

“On the net, Louisiana is expected to add 22,700 jobs in 2013,” Scott told his audience, “and another 27,500 in 2014.” This projection represents an anticipated 1.3 percent improvement for employment – which is 0.4 percent better than the 0.9 percent recovery level the economist called for in his 2012-2013 report.

A welder works on an oil platform in the Tri-parish area. More work could be headed to the area in the future, as former LSU professor and renowned economist Loren Scott says he believes the area is in line for an economic boost in the years 2013-14. Scott said the area could leap Lafayette as the fastest growing area in the state. 

FILE PHOTO