The Capital Region will have gained back about 81% of the jobs it lost to the COVID-19 pandemic by the end of this year, outpacing the rest of the state, economist Loren Scott predicts.
Much of that growth will be driven by the Baton Rouge-area’s industrial construction sector, which the pandemic hit hard, he says. About $6 billion worth of projects are underway and another $7.8 billion have been announced but are not yet moving forward.
“I think virtually every one of these [projects] are going to pull the trigger between now and 2023,” Scott says.
As previously reported, Scott’s modeling indicates the Capital Region will add about 16,600 jobs next year and 5,300 jobs the year after, which would represent growth of 4.2% and 1.3%, respectively, on the way to setting a new record for total jobs in the region with 415,300.
During a luncheon presentation today, Scott also touted the $200 million, 3.5 million-square-foot Amazon fulfillment center under construction at the old Cortana Mall site on Florida Boulevard. Amazon’s growth is not 100% positive for Baton Rouge’s economy because it comes at the expense of traditional retail—Scott noted the symbolism of an old mall being torn down to make room for the online retail giant—but the new fulfillment center is a net gain for the region, he says.
“These are some big wins,” he says.
Scott anticipates oil prices will hover between $65 and $70 per barrel over the next two years, while noting that energy prices are notoriously hard to predict. More importantly for the Capital Region, he expects natural gas to average $3.12 per million Btu, down from the recent price spike.
At that price for natural gas, north Louisiana’s Haynesville Shale play still would benefit. However, the Capital Region’s petrochemical sector wouldn’t be paying exorbitant prices for fuel and raw materials, Scott says.
Scott also says announced infrastructure projects will improve traffic flow, mitigate flood risk and allow Capital Region residents to pay less for flood insurance than they otherwise would.
Potential headwinds could include higher taxes and heavy-handed regulation by the federal government, he says, along with the loss of federal stimulus dollars. He projects the nation will finish the year with 6.6% growth of its gross domestic product, followed by about 4.4% next year and 2.2% the year after.
For a digital copy of the Louisiana Economic Forecast summary, available to Insiders, click here.