Getting the green light
|Road construction and sewer projects have helped to bolster the Capital Region's economy, which has dodged—but not totally avoided—the worst of the recession.|
Mayor Kip Holden was his typical ebullient self when he addressed the Baton Rouge Growth Coalition on July 11. In front of architects, engineers, developers, contractors, real estate agents and planners, he gave a new version of his usual pep talk about how well Baton Rouge has withstood the national recession.
"No city in America has more going on than Baton Rouge, Louisiana," he said. "The economy is really on an upswing."
Setting aside Holden's hyperbole, the mayor did have good news to share.
The Green Light Plan road construction program, currently at $460 million and counting, and $1.3 billion sewer overhaul are providing work for some of the people in the room. Officials have said that more than 90 local firms have worked on Green Light projects, and 180 firms with a Baton Rouge presence have participated in sewer-related work.
Publicly financed projects have helped to prop up the local economy, which has dodged the worst of the Great Recession but clearly hasn't avoided it. Business Report's 2011 list of Top 100 private companies, which reflects 2010 revenues, shows signs of improvement: More than half of the companies on last year's list experienced a revenue decline, but only about one-third reported a decrease this time.
The Capital Region's recovery from the recession has been relatively weak, in part because the local economy didn't fall that far in the first place. Looking forward, there's plenty of room for optimism.
The region has lost about 900 nonfarm jobs since May 2010, which isn't much for a nine-parish area. Take 1,300 federal census workers out of the equation, and the employment numbers are flat. New people continue to enter the job market, so unemployment rose to 8.4% in May, slightly above the state average but still below the national rate of 9.1%.
"We've kind of bounced along the bottom, but we still haven't gotten positive employment growth numbers," economist Loren Scott says.
Until that happens, Scott isn't ready to say the economy is really rebounding. But he notes that cheap natural gas has boosted the petrochemical sector. Shuttered units have been fired up, and several companies have announced new projects.
"It might be an overstatement to say it's hot," says Bob Alford, CEO of AWC, an industrial sales and distribution firm that benefits from petrochemical work. "It's very steady, and we've got expansions here and there."
AWC, seeing opportunities in the sluggish economy, recently has acquired some smaller businesses. But Alford says he still worries, knowing the plants can turn off the spigot as quickly as they turned it on.
The Legislature has come and gone, apparently without causing massive layoffs in state government or at the universities. Short of a double-dip national recession, it's hard to see anything negative on the horizon that would cancel gains from projects that have been announced. The Baton Rouge Area Chamber expects the job numbers to improve by year's end, President/CEO Adam Knapp says.
The Celtic Group, which has interests in real estate, shipping and movie production, has seen its revenue grow after what CFO Bob Bayham says was a tough 2009, thanks to a weak dollar, which helps Celtic's export shipping business and several big productions at Raleigh Studios. Bayham is optimistic for the immediate future, but realizes not everyone feels the same.
"There's still a lot of uncertainty with the overall economy," he says.
Construction jobs have flatlined, as the end of the GO Zone program and the lack of new residential and commercial construction have been balanced out by health care, petrochemical and public-sector projects. Home sales remain slow, down 13% the first half of this year compared to 2010.
Karl Landreneau, who directs commercial sales and leasing for Latter & Blum, says a lot of money still is sitting on the sidelines, waiting for the economy to pick up. But until more of that money gets back in the game, there might not be a truly robust recovery.
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