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Oct 6, 2010 2:43 PM

LA will experience anemic job growth in 2010-2011

NEW ORLEANS (AP) - Louisiana will experience anemic job growth in 2010-2011 and those modest gains could be wiped out by wild cards, such as an extended ban on deepwater petroleum drilling in the Gulf of Mexico, according to an economic report released

A group of university economists, in an annual projection of employment for the upcoming two years, predicted the state will add 3,100 jobs in 2011 and 7,500 jobs in 2012, for yearly growth rates of 0.2 percent and 0.4 percent.

But a number of yet-to-be settled factors could cut deeply into the number, such as the drilling ban, proposed petroleum taxes, cap-and-trade legislation, expiration of Bush-era income tax cuts and whether Texas decides to legalize gambling, the study said.

The six-month drilling moratorium, which is scheduled to expire at the end of November, hasn't deeply affected employment so far, jobs reports have shown. And the federal government has indicated it might end the ban early. President Barack Obama has favored
cap-and-trade legislation as a way to control emissions, but business interests contend it would be a job-killer.

The report said that if the moratorium extends into 2011, up to 21,000 jobs would be at risk, especially if deepwater rigs are moved from the Gulf of Mexico on extended overseas contracts.

Besides the moratorium, the offshore industry also faces compliance with new regulations and higher insurance costs resulting from the BP oil spill, said Loren Scott, professor emeritus of economics at Louisiana State University and one of the authors of the study.

"Even if the moratorium is declared over tomorrow, we think there will be a general slowdown in the Gulf of Mexico," Scott said.

Among the state's metropolitan areas, the report projects the strongest percentage of job growth in Baton Rouge and Lake Charles, followed by New Orleans, while Lafayette and Houma-Thibodaux could
see significant drops.

Some highlights:

- Over the next two years, Baton Rouge will add 3,000 jobs in 2011 and follow that with another 3,700 jobs in 2012, for annual growth rates of 0.8 percent and 1 percent. Lake Charles will add 800 jobs in both 2011 and 2012 for rates of 0.9 percent each year.

Baton Rouge will benefit from new manufacturing plants and expansion of existing plants, the report said. The region's biggest question mark is whether state employment will decline because of state budget problems.

Lake Charles is expecting the opening of a nuclear power components plant by The Shaw Group, expanded aircraft maintenance work and overhauls of chemical plants. Like Shreveport-Bossier City, the area's casinos are expected to take a hit if Texas legalizes gambling.

- New Orleans will add 3,600 jobs in 2011 and 4,700 in 2012, for annual growth rates of 0.7 percent and 0.9 percent. However, the report warns the planned closing of the Northrop Grumman shipyard in suburban Avondale, which currently employs about 4,400, will not be felt until early 2013. The study predicts "a very difficult year" in 2013 for the region.

At the same time, there have been several manufacturing expansions in the area and larger product distribution operations, the report said. In the tourism area, the study said the number of
convention-goers has stabilized since Hurricane Katrina at about 850,000 annually - still a third below the pre-storm figure.

- Shreveport-Bossier City will add 1,100 jobs in 2011 and 800 in 2012, for annual growth rates of 0.6 percent and 0.2 percent. The region faces the shutdown of the General Motors plant in Shreveport
no later than 2012, which will end about 800 jobs. Although peak drilling activity will have passed in the Haynesville Shale natural gas formation, employment will be boosted by petroleum service
industries expanding in the area, the report said.

- Two petroleum-sensitive regions - Lafayette and
Houma-Thibodaux - face employment drops because of a projected slowdown in Gulf oil and natural gas activity. The report projects a loss of 3,000 jobs in 2011 - 2 percent - and a loss of another 800 in 2012, or 0.6 percent. Houma-Thibodaux is forecast to have a
1,500 jobs falloff - 1.7 percent - in 2011 and lose another 500, or 0.5 percent, in 2012.

An extended deepwater drilling ban would cut deeply into both regions, the report said, with Lafayette losing as many as 9,000 jobs and Houma-Thibodaux losing 6,000.

- Monroe, which has lost 3,900 jobs in a rash of major business losses since 2003, will modestly reverse that trend with job gains of 400 in 2011 and 400 in 2012, about 0.5 percent each year.

- Alexandria is expected to add 400 jobs in 2011 and 400 in 2012, about 0.6 percent each year.

Non-metropolitan areas of the state, which comprise about a fifth of Louisiana's employment, are expected to lose 500 jobs in 2011, but gain back 400 in 2012.



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