Baton Rouge Reporter

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If the financial markets, national and global, seem in constant turmoil, the real economy in the region centered around Baton Rouge is awash in good business news.

But with record low unemployment and a broad recovery from the pandemic that started in March 2020 — not least in tourism, which has rebounded to more than $1 billion in 2022 spending — there remain serious headwinds from national policy.

The Advocate convened business leaders for its 2023 Economic Outlook Summit and probed some of the prospects for different types of growth, whether in general employment or industrial construction projects.

As Mayor-President Sharon Weston Broome said, there has been “tremendous change in the last few years.”

An understatement, of course, but coming out of those years, business leaders surveyed by the Baton Rouge Area Chamber showed considerable optimism about hiring. That outlook includes “the lowest unemployment rate on record for the Baton Rouge area, ever,” BRAC’s Adam Knapp said.

He also reported that new business formation is growing and migration is coming to the region. However, the main category of outmigration is in those of college-graduation age, a key issue for businesses and a focus of recruitment work by the chamber.

At the same time, the issues in the national economy intrude on a generally positive picture: Interest rates hit homebuilding, particularly the multifamily housing market, said Tom Delahaye, president and CEO of CST Multifamily Group.

“We talk about interest rates every day,” added Ginger Laurent, CEO of the Louisiana Bankers Association.

Laurent said her members are optimistic that clients will still be willing to take out loans. However, those clients are moving cautiously as interest rate uncertainty lingers.

“I think capital is there, but I think we’ll see the movement just a little slower just to make sure all the questions are answered before they move forward with new activity or expansion,” she said.

Building costs are an issue, whether in business or in new roads and bridges — vital needs in the capital area as well.

Health care systems want to increase care access, Ochsner’s Tre Nelson said, but every new facility he has worked on over the past three years has been affected by inflation and interest rates.

“Building a new facility costs so much more now than it did previously,” he said.

At the same time, wages have been going up in Baton Rouge — and that’s good or bad, depending on whether one is an employee or an employer, panelists said.

Despite wage increases, in a market where the unemployment rate is 2.6%, Baton Rouge employers have three open positions for every single unemployed resident looking for work, Knapp said.

Baton Rouge Community College Chancellor Willie E. Smith Sr. said two-year colleges need to be churning out new workers, particularly as demand for industrial employees continues to rise. All educational institutions must be more flexible going forward because of demand for new employment, he said.

”If we had been doing some of these things 10 to 15 years ago, we probably wouldn’t be seeing some of these disparities in the workforce,” Nelson added.

Whether high school or college graduates, panelists see jobs for the future, and that’s good news for the region.

If the financial markets, national and global, seem in constant turmoil, the real economy in the region centered around Baton Rouge is awash in good business news.

But with record low unemployment and a broad recovery from the pandemic that started in March 2020 — not least in tourism, which has rebounded to more than $1 billion in 2022 spending — there remain serious headwinds from national policy.

The Advocate convened business leaders for its 2023 Economic Outlook Summit and probed some of the prospects for different types of growth, whether in general employment or industrial construction projects.

As Mayor-President Sharon Weston Broome said, there has been “tremendous change in the last few years.”

An understatement, of course, but coming out of those years, business leaders surveyed by the Baton Rouge Area Chamber showed considerable optimism about hiring. That outlook includes “the lowest unemployment rate on record for the Baton Rouge area, ever,” BRAC’s Adam Knapp said.

He also reported that new business formation is growing and migration is coming to the region. However, the main category of outmigration is in those of college-graduation age, a key issue for businesses and a focus of recruitment work by the chamber.

At the same time, the issues in the national economy intrude on a generally positive picture: Interest rates hit homebuilding, particularly the multifamily housing market, said Tom Delahaye, president and CEO of CST Multifamily Group.

“We talk about interest rates every day,” added Ginger Laurent, CEO of the Louisiana Bankers Association.

Laurent said her members are optimistic that clients will still be willing to take out loans. However, those clients are moving cautiously as interest rate uncertainty lingers.

“I think capital is there, but I think we’ll see the movement just a little slower just to make sure all the questions are answered before they move forward with new activity or expansion,” she said.

Building costs are an issue, whether in business or in new roads and bridges — vital needs in the capital area as well.

Health care systems want to increase care access, Ochsner’s Tre Nelson said, but every new facility he has worked on over the past three years has been affected by inflation and interest rates.

“Building a new facility costs so much more now than it did previously,” he said.

At the same time, wages have been going up in Baton Rouge — and that’s good or bad, depending on whether one is an employee or an employer, panelists said.

Despite wage increases, in a market where the unemployment rate is 2.6%, Baton Rouge employers have three open positions for every single unemployed resident looking for work, Knapp said.

Baton Rouge Community College Chancellor Willie E. Smith Sr. said two-year colleges need to be churning out new workers, particularly as demand for industrial employees continues to rise. All educational institutions must be more flexible going forward because of demand for new employment, he said.

”If we had been doing some of these things 10 to 15 years ago, we probably wouldn’t be seeing some of these disparities in the workforce,” Nelson added.

Whether high school or college graduates, panelists see jobs for the future, and that’s good news for the region.

Original source can be found here.