Wednesday, July 17, 2024

NWLA economy turns the corner

by BIZ. Staff
Economist says Shreveport-Bossier MSA economy improving, outlook positive

Northwest Louisiana’s economy is picking up as it turns a corner from almost a decade-long lull, according to economist Dr. Loren Scott.

In his annual Louisiana Economic Outlook report published in early October, Dr. Scott summarized that after falling to 12,700 jobs below its 2008 peak, the Shreveport-Bossier MSA is projected to return to positive, but modest growth over the next two years.

At the end of this year, Scott projects the MSA to be up by about 500 jobs. And he expects to see 600 jobs added in both 2019 and 2020.

During a presentation at the Port of Caddo-Bossier at the end of September, Scott said he expects Shreveport-Bossier to continue its growth, just not as fast as the state’s other metro areas.

“No it’s not moving as fast as other parts of the state. If you go down to, say below I-10, and look on the Mississippi River from Baton Rouge to the mouth of the Mississippi River, there’s just a monstrous amount of industrial construction going on there. So, they are growing a good bit faster,” Dr. Scott said during his presentation.

The Shreveport-Bossier MSA — comprised of Caddo, Bossier, Webster, and DeSoto Parishes — is now the fourth largest MSA in Louisiana with an estimated 180,000 non-farm jobs in 2018.

It has been a turbulent decade for the Shreveport-Bossier MSA.

Money from the Haynesville Shale exploration and a rise in local sales tax collections helped stave off effects of the Great Recession for almost a year. However, times eventually caught up with the MSA. The closure of the GM plant in Shreveport, rigs leaving the Haynesville Shale play, a reduction of forces at Barksdale, and layoffs from Libbey Glass contributed to an erosion in the MSA’s economy.

Except for slight growth in 2010-11, the Shreveport-Bossier MSA was in a decline from 2008 to 2017, losing 12,700 jobs (-6.6 percent). 

However, Dr. Scott noted that after almost a decade of decline there is evidence that a “corner has turned in this MSA and growth — though modest — is starting to occur.”

Shreveport-Bossier’s employment saw a .3 percent growth rate this year with another .3 percent growth expected to follow in 2019 and 2020. He added that this MSA has seen four straight months of employment growth from April through July.

Dr. Scott credits General Dynamics IT (formerly CSRA) and its 1,100 employees and Glovis America hiring 156 employees at the old GM plant. as primarily driving that growth.

He expects Barksdale Air Force Base to remain stable over the next two years. Pointing out that a $21 million Communications Squadron complex is at the planning stage and should start construction within 2019-20.  Bonds will likely be let soon for a $90 million road from the I-20/I-220 interchange into the base.

A wildcard is the Haynesville Shale.

After peaking at 142 rigs in April 2010, the count plummeted to only 15 rigs in June 2016. Since then, the rig count has doubled to the 35 range.

Scott said the LNG and chemical projects in the southern part of the state could create demand for the nearby gas in the Haynesville Shale.

“Driftwood LNG is proposing to build the Haynesville Global Access Pipeline down to its site in the Lake Charles area. We understand Driftwood has closed the offerings for this pipeline because interest already exceeded the pipeline’s capacity. Will more drilling activity be necessary to meet this new demand?  We can only hope,” Dr. Scott said in his report.

He noted that the Port of Caddo-Bossier has been a “rock solid” contributor with approximately 1,700 people being employed at various clients at the Port.

He noted that one of their tenants, Benteler Steel, should see a bump from President Donald Trump’s steel tariffs. The company held a job fair in July to fill 75 hourly maintenance positions.

However, he said the region’s outlook suffers from a lack of major announcements supporting the next two years.

“The tricky thing in examining this MSA’s future is finding the ‘beef’ — the big projects coming down the line that could jack this economy up to a higher, more acceptable trend,” Dr. Scott said in his report.

And the gaming industry is also hurting. He said that more than 1,100 jobs were removed over the past four years.

Scott notes in his report that competition with Indian casinos in Oklahoma has significantly eaten into Shreveport-Bossier’s gaming sector over the past few years. Specifically, this sector has shed 1,133 jobs between 2014 and 2018 according to data from the Louisiana Gaming Control Board.

“There appears from the data to be no reason for hope that there will be an arresting of the downward employment trend in this industry,” Dr. Scott said in the Louisiana Economic Outlook.

The report comes amidst what Dr. Scott proclaims is Louisiana’s recovery from a more than 2-year-long statewide recession.

Overall, he said that Louisiana is expected to add 23,400 jobs (+1.2 percent) in 2019 and an even better 36,100 jobs (+1.8 percent) in 2019.

“If our projections are on the mark, the state should surpass 2,000,000 jobs on an annual basis for the first time in its history in 2019,” Dr. Scott’s report said.

You may also like

Update Required Flash plugin