The gist: UL Economist Gary Wagner predicts around 1% job growth for Acadiana this year, a rate that would beat statewide projections but still lag behind the nation. Speaking at The Acadiana Advocate’s Economic Summit Wednesday, Wagner was joined by a panel of business leaders optimistic about the region’s economy going forward.
Over the last year, Lafayette’s MSA has seen some of the best job growth since 2013, according to Wagner. “This recent growth is consistent with the long-run average growth in the region,” he said.
Oil and gas jobs are still down 40% since 2014. And Wagner said growth in oil and gas jobs is flat.
But healthcare has been picking up some of the slack. Wagner believes the industry will soon be the largest sector of the local economy. Oil and gas, once the largest industry in the area, is now fourth.
The biggest risk to his projections is a national recession. The U.S. economy is experiencing a record 126 consecutive months of growth, which is why there’s been a lot of talk about an inevitable recession, potentially soon. If a national recession does happen in 2020, Wagner said it would lower his projections for local job growth.
“We need to create more jobs with higher pay at a faster pace,” Wagner continued, chiming in on a discussion of his research into the causes of severe outmigration patterns in Louisiana. More than 90,000 residents have left the state over the last few years.
Business leaders are generally optimistic. “With the fall of oil and gas, we should be going down,” said John Bordelon, CEO of Home Bank. “But we’re not because of the resiliency of our people.”
Hotel/motel occupancy has been rebounding. While not fully recovered from 2014 highs, occupancy has been up in eight out of the last 11 months, according to Ben Berthelot, president and CEO of the Lafayette Convention and Visitors Commission. He credited some of that growth to public investment in sports complexes in Broussard and Youngsville, which have attracted sporting events, and LCVC’s recruitment of events to this area.
There’s still hope for growth driven by Opportunity Zones. Opportunity Zones are low-income areas where special tax breaks have been designed to encourage investment in development and companies. One Acadiana President and CEO Troy Wayman cited Lafayette General Health’s fund for Oil Center investment as one example. And commercial Realtor Flo Meadows shared her belief that 2020 will be the year to watch for Opportunity Zone investments, citing $500 billion in available capital in the program nationwide.
Oil execs blamed lawsuits and warned that a slow down in Texas could hurt local companies. Art Price, CFO of Badger Oil, linked an “all-time high” in the number of suits, which seek restitution for environmental damage from decades of drilling, to depressed drilling activity in the state. While the number of oil rigs has doubled nationally since 2015, Louisiana’s share has tanked and failed to recover. Most Louisiana activity is concentrated in the Haynesville Shale and deep waters. Price also warned that a recent bonanza in Texas’ Permian Basin could cool off, potentially hurting the many Lafayette companies that have deployed personnel and equipment there. The bottom line: Price projects 2020 to be more of the same stagnation as was seen in 2019 in Lafayette’s oil and gas sector.
GDP, personal income, employment, retail and real estate sales are all increasing, but without oil and gas recovering our economy is trending towards mediocrity.
While one economist may be projecting the end of Lafayette’s recession, more context is needed to understand the situation our economy is in
The day started with the news that LAGCOE was leaving for New Orleans and ended with a pitch competition that’s a symbol for a future where Lafayette is a hub for healthtech startups.