Measuring the Past to Capitalize on the Future
BRAC’s Economic Outlook is a collection of the Capital Region’s key economic health indicators for the past year benchmarked against historical data and the performances of our peer cities. Economic indicators include an evaluation of regional job growth, income growth, and unemployment rates over the last decade. BRAC produces the annual Economic Outlook for several reasons. It provides relevant economic data essential to inform the region’s businesses as they prepare for the upcoming year, tracks the progress of the regional economy, and brings to light the major concerns of business leaders in the Capital Region. Additionally, the report includes results from a survey of the region’s business leaders to gauge obstacles for business, economic optimism, and workforce perceptions.
Read a summary of findings from the 2018 Economic Outlook below or view the full report at brac.org/reports.
Continued Job Growth and Reduced Unemployment
A fundamental indication of a prospering economy is a simultaneous increase in job growth and decrease in unemployment, which can lead to increased demand in the labor market, flexibility in wage negotiation, and an overall increase in tax collections.
In 2017 the Baton Rouge MSA:
- Experienced growth of over 9,000 jobs, increasing regional employment to 413,600 from the previous year’s 404,500
- Outperformed the state’s job growth by .8 percent
- Reduced unemployment from 4.6 percent in December of 2016 to 3.7 percent in October of 2017
- Grew jobs in 55 percent of local industries, which include a 5.2 percent growth in Education and Health Services, a 4.1 percent growth in Leisure and Hospitality, and a 1.6 percent growth in Financial Services
Often, job growth has direct correlation to growth in the overall number of businesses in a region, particularly for small businesses. The Capital Region, for example, has experienced explosive growth in businesses with 1 to 99 employees.
- The overall number of businesses has grown from 45,892 to 60,738, representing an increase of 32 percent
- Small businesses (defined as employing 99 people or fewer) account for over 75 percent of the region’s jobs while businesses with 9 or fewer employees account for 32 percent of total jobs
- Small business continues to be the backbone of Capital Region economy
Survey: Obstacles for Business
Each year, BRAC surveys regional business leaders to quantify their outlook on the regional economy. This survey provides real insights into the concerns of those who are directly affected by issues ranging from traffic infrastructure to litigation cost.
In the 2017 survey:
- 19.6 percent reported traffic as a major obstacle for their business, making it the number one issue on our survey
- Aside from traffic, workforce issues and a lack of good public schools/cost of private schools rank among the top three major obstacles – the same top three as the prior year
- Respondents have indicated an increase in concern for the Capital Region’s crime rate; 8.9 percent reported this as a major obstacle compared to the prior year’s 3.1 percent
In terms of 2018, BRAC projects that the Capital Region will see moderate, but continued, growth. Based on an aggregation of a number of forward-looking projections, we believe the Baton Rouge metropolitan area will see 1.1 percent growth next year, which translates into approximately 4,500 new jobs. The industries primed to see the greatest growth are Construction (2-4 percent growth); Arts, Entertainment, and Recreation (2-4 percent growth); and Professional & Business Services (1.4-2.0 percent growth). In terms of job growth, Ascension is projected to have the highest percentage of job growth, at 4 percent, while East Baton Rouge is primed to add the most net new jobs, with 2,602. However, each of the nine parishes in BRAC’s region are projected to add jobs in 2018.
Written by Thomas Laborde
As the economic research analyst intern, Thomas is responsible for supporting a variety of projects and programs for the economic competitiveness team, including several reports on economic trends.