1. 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

2. 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

3. Historical Perspective: State Employment Changes Per Year

4. 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

5. SHORT-TERM PROJECTIONS ARE THERE TEN YEAR PROJECTIONS? Making Projections

6. 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

7. 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

8. Forecast of National Economy, % Change in Gross Domestic Product

9. Price of Oil Forecast

10. Change in Oil Production

11. Shale Plays in Lower 48

12. Tuscaloosa Marine Shale

13. Estimates of Price of Natural Gas

14. 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

15. Employment Changes in BR Area

16. 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’

17. Baton Rouge Forecast, 2015-2016

18. Construction Employment for Louisiana

19. Louisiana Forecasts, 2015-2016

20. 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