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Economist: Louisiana recovering faster than nation
Thanks to a booming petrochemical industry and numerous jobs headed to the state in the next few years, Louisiana’s current economic conditions and its economic future far surpass the national outlook, says economist Loren Scott.
The United States is “in the middle of a tepid recovery” from an economic downturn referred to as the “Great Recession,” he said. At the current growth rate, full recovery can’t be expected until well into 2014.
But Scott says Louisiana expects to add nearly 70,000 jobs in the next two years, 34,000 in 2014 and 33,600 in 2015. “For the first time, there will be two million people working in Louisiana. In January 2013 we set new records” for the number of people employed in the state.
The retired LSU economics professor who now runs his own forecasting business laid out details of his research findings Thursday at the American Council of Engineering Companies of Louisiana’s “Project Outlook” conference.
National economic slumps are not uncommon, he said, but “This is the worst recovery period there’s been since World War II.”
The depth of the recession has nothing to do with the recovery problem, Scott said. “It has everything to do with taxes.”
The nation went through two recessions of the same depth in the 1980s but bounced back because President Ronald Reagan got Congress to cut taxes and deregulate industries, he said. “Today, we’re increasing taxes and regulations.”
While the nation struggles, Louisiana is booming.
“Louisiana lost jobs only two years” while most states had job losses for four years, Scott said. “Now we’re setting records for employment.”
Major developments in oil and gas exploration, putting new technology to work, bringing in new businesses and expanding chemical processing plants are sparking the growth, his research shows.
“The Gulf of Mexico is back,” he said, with 36 rigs working — 3 more than before the BP oil disaster caused a major slowdown in offshore drilling activity. Deepwater drilling is discovering “elephant finds” of massive amounts of oil, he said, and “taxes, royalties and regulations are the lowest in the world” so international companies are drilling.
Getting it to refineries is no problem because “there are enough pipelines in Louisiana alone to circle the earth five times,” Scott said.
With numerous plant expansions and major construction jobs, like the $14.5 billion Sasol natural gas to gasoline plant being constructed near Lake Charles, a $12.5 billion Shell gas-to-fluids plant planned for Ascension Parish and the $975 million Benteler Steel plant being built near Shreveport, Scott described Louisiana as being in a “Holy Cow!” job situation.
Also, several companies are building large ethanol and biodiesel plants and fertilizer plants.
He said the Port of Lake Charles is building a “man camp” to house 4,000 workers.