Industrial boom to result in 24,500 new jobs through 2025 in Baton Rouge area- Economist

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With large industrial projects leading the way, the Baton Rouge region should add 24,500 jobs over the next two years, according to the Louisiana Economic Forecast, an annual report published by economist Loren Scott.

The “full-thrust industrial construction expansion” has led local firms to beef up their ranks, according to Scott’s report, which was unveiled Tuesday at the Louisiana Business Symposium, an annual economic conference hosted by the Greater Baton Rouge Business Report.

"This is the most optimistic growth rate that I've ever shared for the Baton Rouge area," Scott said at the symposium.

A year ago, engineering firms were “absolutely slammed” with front-end engineering and design, or FEED, work. Now the burden has shifted to the region’s industrial construction sector.

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Turner Industries, which already employs 10,000 people, is expecting to add 3,000 more workers to handle the boom, Scott’s report said. Meanwhile, Performance Contractors has added 2,000 workers over the last year. Similar expansions should happen at ISC, MMR, Cajun Industries and others.

“The next two years will be bountiful for these firms,” the report said.

According to a Greater Baton Rouge Industry Alliance survey, the region will need 5,400 more industry workers by 2025, including 2,000 electricians, 500 instrument technicians, 700 millwrights and 2,200 pipefitters and contract welders.

The Baton Rouge area has $11.6 billion worth of industrial projects underway, Scott’s report said. Notable developments include Air Products’ $4.5 billion “blue” hydrogen plant in Ascension Parish, Methanex Corp.’s $1.6 billion methanol plant in Geismar, Shintech’s $1.3 billion expansion of its PVC pipe manufacturing facilities in Iberville and West Baton Rouge parishes, and Renewable Energy Group’s $1.2 billion expansion of its Geismar biorefinery.

Meanwhile, another $19 billion worth of announced projects for the region have a “high probability” of reaching a final investment decision next year, Scott’s report said. A final investment decision is when a business formally moves forward with a project after securing financing for it.

Those pending projects include several Ascension Parish developments: Clean Hydrogen Works’ $7.5 billion “blue” ammonia plant, Nutrien’s $2 billion “clean” ammonia plant, CF Industries’ $2 billion “blue” ammonia plant and Mitsubishi Chemicals’ $1.9 billion methyl methacrylate complex. Gron Fuels’ $9.4 billion renewable fuel plant at the Port of Greater Baton Rouge could also reach a final investment decision next year.

Amazon’s fulfillment center at the old Cortana Mall site, set to open in mid-2024, should add another 1,000 jobs or more. Meanwhile, Burrell Aviation’s $113 million development at the Baton Rouge Metro Airport could add upward of 1,500 jobs. The Queen Casino, which recently finished its $85 million development, is expected to add another 100 jobs.

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The report said Louisiana will weather a short national recession — fueled by continued interest rates increases amid stubborn inflation — that should start in early 2024 and last for about two quarters.

Scott cited three main reasons for Louisiana’s resilience: the state doesn’t produce many durable goods, which consumers tend to avoid during a recession; metro areas here are continuing to recover jobs lost to COVID and natural disasters in recent years; and an “unusually large” number of major capital projects have been announced

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The report said New Orleans, Baton Rouge and Lake Charles have $154 billion worth of industrial projects in the queue. However, about $120.6 billion of that total represents projects that haven’t reached a final investment decision yet.

A key cog in those investment decisions will be carbon capture and renewable electricity. Many of those projects’ profitability will depend on their ability to secure tax credits through the Inflation Reduction Act, and they will be fueled by renewable electricity, which has left Louisiana utility companies scrambling for solar and wind power.

Scott’s forecast is based on oil hovering at $80 per barrel next year and natural gas inching up toward $3.90 per million British thermal units by 2025.

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One area primed for growth could be Lake Charles. That region could gain 7,200 jobs over the next two years. However, Scott said those “optimistic projections” depend heavily on whether a trio of liquefied natural gas projects — Commonwealth LNG, CP2 LNG and Driftwood LNG — reach a final investment decision.

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