Despite lingering national economic uncertainly over the bubble bursting in the housing market and rising energy costs, LSU economist Loren Scott predicts a soft landing nationwide and a solid outlook for metro Baton Rouge. Scott presented his promising predictions today as part of Business Report’s 25th Annual BizTech Expo, which started today at the River Center.
For metro Baton Rouge, Scott says there are several key factors fueling the area’s healthy 2008-09 economic forecast:
-- Some 7,400 new jobs are projected for 2008 and another 7,500 new jobs for 2009. This growth rate would make the area the fourth fastest growing metro area in the state behind Houma, New Orleans and Lafayette.
-- More than $5 billion in construction projects are underway or planned for the region, making construction a major player in the area’s economic future. Planned projects include Shintech, Shaw Biofuels, John James Audubon Bridge, the 19th Judicial District Courthouse and retail/residential developments including The Boulevard at the Mall of Louisiana and Perkins Rowe.
-- The region’s large petrochemical sector has begun to expand. The area has the largest concentration of chemical industry jobs in the state, and is home to the second largest refinery, ExxonMobil, in the nation.
-- Two major call centers (Direct General and Staples), 12 new hotels and smaller gains in manufacturing firms will promote further job growth. Some 14,800 new jobs are projected in the area in 2008-09, averaging 2% growth per year. There are 369,900 jobs in the area, second largest behind New Orleans. LSU, Southern University and state government offices are also substantially boosting the work force.
-- As the closest metro area to New Orleans, the nine-parish region benefited in housing and retail as a magnet for hurricane evacuees, initially attracting about 250,000 people. June 2005 figures show growth settled around 35,192 new residents or 5% growth mostly in East Baton Rouge Parish. The parish is nudging up against Jefferson Parish as the most populous in the state according to 2006 census estimates.On the national scene, Scott further eased fears over an impending recession from the nation’s declining housing market. Housing only accounts for 6.2% of the nation’s $12.9 billion economy this year. Sub-prime delinquencies are up from 10% to 18%, but he says sub-prime loans are isolated to 9% of the mortgage market. The prime market accounts for 83% of the market and it only has a 5% delinquency rate that’s hovered at that figure since 1996.