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AMERICAN COUNCIL OF ENGINEERING COMPANIES OF LOUISIANA. PREPARED BY DR. JIM RICHARDSON ALUMNI PROFESSOR OF ECONOMICS LOUISIANA STATE UNIVERSITY Economic Outlook Louisiana and Baton Rouge
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Looking at Louisiana’s Past We divide the past 40 plus years into decades and then smaller time dimensions 1970s---oil, oil, and more oil—a boom for Louisiana 1980s—every boom has a bust 1990s—a ten year expansion nationally and locally The 2000s—must be divided into several time dimensions From 2000 to 2008—nationally very marginal growth; Louisiana had its Katrina/Rita and then the recovery 2008-2010—the financial meltdown 2010 through 2013, the recovery
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Historical Perspective: State Employment Changes Per Year
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Historical Perspective MSA Employment Gains or Losses Per Year MSAs/Rural Parishes (RLMA) 1990s2000-20082008-20102010-2013 Alexandria (RLMA 6) 1,005870-1,790-260 Baton Rouge (RLMA 2) 8,0204,450-5,6206,880 Houma-Thibodaux (RLMA 3) 1,9902,460-2,5002,380 Lafayette (RLMA 4) 3,5602,500-2,1403,930 Lake Charles (RLMA 5) 1,530750-3,0101,290 Monroe (RLMA 8) 1,69080-1,170710 New Orleans (RLMA 1) 8,610-11,300-3,1707,420 Shreveport-Bossier (RLMA 7) 3,4801,220-1,970-1,320 Rural Parishes3,0801,440-5,0401,060 State33,0002,470-26,40022,100
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SHORT-TERM PROJECTIONS ARE THERE TEN YEAR PROJECTIONS? Making Projections
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Louisiana Economic Outlook, 2014-2016 MSA201420152016 Louisiana1,971,4002,005,5002,038,100 Alexandria62,50063,00063,400 Baton Rouge394,000403,200413,500 Houma/ Thibodaux 101,500104,000106,000 Lafayette161,000166,000168,700 Lake Charles95,00099,000104,000 Monroe78,80079,40080,000 New Orleans553,000561,500570,000 Shreveport/ Bossier 171,500173,000173,500 Rural Parishes351,000354,000355,000 Baton Rouge and New Orleans over half of growth
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Long-term Employment Projections, LED/LWC (includes Sole Proprietors) State/Regional Labor Market 2012 2022 Average Annual Growth Rate State2,000,0002,260,0001.3% Alexandria115,280127,3901.1% Baton Rouge445,150513,7601.5% Houma-Thibodaux105,000122,8401.7% Lafayette291,070330,1701.3% Lake Charles121,390142,7001.8% Monroe116,770128,8501.0% New Orleans562,360620,9501.0% Shreveport-Bossier247,820277,6301.2% Forecasts Generated by LED, LWC, and LSU Division of Economic Research with knowledge of activities in Baton Rouge and Lake Charles
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Forecast of National Economy, % Change in Gross Domestic Product
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Price of Oil Forecast
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Change in Oil Production
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Shale Plays in Lower 48
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Tuscaloosa Marine Shale
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Estimates of Price of Natural Gas
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Natural Gas Forecasts Price of Natural Gas Remains relatively low—abundance of natural gas World Prices do not converge to 2005/2008 status 2005, price of natural gas in Germany, Japan, and U.S. we approximately $6 per thousand cubic feet (MCF) Today, price of natural gas in Japan (almost $18 per mcf), in Germany (almost $12 per mcf), and in the U.S. ($4 per mcf) Price of natural gas remains much lower relatively than price of oil Normal ratio, based on btus, price of oil about 6 times price of natural gas. Presently, it is $80 per barrel of oil to $4 per mcf of natural gas or price of oil is about 20 times the price of natural gas
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Employment Changes in BR Area
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Factors in Baton Rouge Area Future Major Investments in Petrochemical industry Dow is pursuing a $1.06 billion investment BASF is building $350 plant addition CF Industries spending $2.1 billion Shintech, $500 million in expansion Methanex Corporation, $1.1 billion investment Plus almost $10 billion in “plans” for investment in the Baton Rouge area IBM Ameritas’
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Baton Rouge Forecast, 2015-2016
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Construction Employment for Louisiana
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Louisiana Forecasts, 2015-2016
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AMERICAN COUNCIL OF ENGINEERING COMPANIES OF LOUISIANA. PREPARED BY DR. JIM RICHARDSON ALUMNI PROFESSOR OF ECONOMICS LOUISIANA STATE UNIVERSITY Economic Outlook Louisiana and Baton Rouge
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