The Baton Rouge metro area’s economy is growing at a faster rate than predicted at this time last year, but workforce development concerns and issues related to transportation and infrastructure threaten to hamper future economic growth, Baton Rouge Area Chamber President and CEO Adam Knapp said this morning during the unveiling of BRAC’s 2016 Economic Outlook.
The good news from the economic outlook is that job growth has increased 3.3% this year, which is higher than the 2.5% growth that was projected in BRAC’s outlook last year. The Baton Rouge area’s job growth, Knapp said, has outperformed that of peer cities like Austin, Texas; Birmingham, Alabama; and Columbia, South Carolina.
“Seeing above 3 percent growth for two years is incredibly good, and that is the overarching story of our economy,” said Knapp during this morning’s presentation at the City Club of Baton Rouge, which was held in conjunction with Baton Rouge Entrepreneurship Week.
The economic forecast for next year calls for job growth between 1.4% and 2.2%, which would translate into between 5,000 and 9,000 new jobs for the Capital Region.
Nearly 80% of the new jobs added this year came from either the professional and business services sector of construction.
“The industrial activity that has been going on is really leading to the rest of the expansion,” Knapp says.
Among the other positive takeaways from the outlook: rates of job growth in the manufacturing sector are between 4% and 5%; median household income in the area has increased 27% over the past decade; home sales thus far this year are up 7.6% over last year; residential permitting is up a whopping 120% over 2014; and city-parish sales tax collections are up 5%.
“This shows a continued increase in consumer confidence,” Knapp said.
BRAC’s outlook is compiled annually based on economic data as well as a survey of businesses and community leaders. Overall, local business owners surveyed by BRAC this year expressed optimism about the coming year and most said they expect to add new jobs and reinvest in capital expenditures. But several issues loom large over the economy and threaten the otherwise bright picture. Primarily, those concerns relate to transportation and infrastructure, Knapp said.
“Transportation is now far, far, far and away the No. 1 concern,” Knapp said. “If we do not see the Baton Rouge area addressing traffic concerns it is going to hamper future growth.”
Workforce development and lack of public school options also rank near the top of the list of concerns among local business owners.
Knapp said another concern is that the rate of job growth in the Capital Region is outpacing population growth, which could lead to even further challenges in filling all the jobs expected to be created in the coming years.
“So when you think about workforce issues, population growth needs to be expanding at a faster rate and we need to see an in-migration,” Knapp said. “We’re growing, our infrastructure is not keeping up with the rate of growth and it is going to hamper what is possible for us if it is not addressed. If we do not have corresponding investments in workforce investments and infrastructure we are not going to be able to sustain this growth on the long term.”