On the Baton Rouge Area Economy

T H e
e co n o m y
Updat
outlo
On the Baton Rouge Area Economy
Snapshot:
Capital Region
in Quarter 3
Unemployment decreased to 7.8 percent –
slightly down from 8.3 percent in June 2010
Job losses were concentrated in goods-producing
industries while the service-providing sector showed gains
Home sales prices have increased only 1 percent from third
quarter 2009 with sales volume decreasing almost 24 percent
Commercial construction permit values have increased
significantly, but residential and overall nonresidential
construction permit values increased only slightly
2
e
ook
In the third quarter, the Capital Region economy is holding steady with mostly stable
and mixed economic indicators. Like many regions, the Baton Rouge area is experiencing
mild recessionary effects while waiting for a national recovery. This stationary position
is likely to continue into 2011 with the holiday season retail consumer spending and
seasonal employment as the bright spots in the fourth quarter.
Employment
Home Sales
The Baton Rouge area added 2,000 jobs over the quarter.
Home sales prices have increased 1% from third quarter
Most of these jobs gains were in the service-providing
2009 while the number of units sold has decreased 24%
sector, primarily retail, real estate, transportation,
in the same time period. Foreclosure activity increased
information, healthcare, financial activities, utilities, and
in the Baton Rouge area during the third quarter as
food and accommodation. Year-over-year employment
well with a recorded 1,109 actions that affected one in
figures by month have been below 2009 levels except
295 properties. This ranked the region 146th nationally.
for the month of June, which was just slightly higher.
The latest rate was up 7.8% from the second quarter
The unemployment rate follows the same trend with
and 29.7% from the third quarter of 2009, respectively.
monthly figures higher than 2009. The September
unemployment rate stood at 7.8%, up from 7.0% in
September 2009.
Q3 2010
3
T H e
e co n o m y
Permits
In East Baton Rouge Parish, the number of commercial permits has increased from the
third quarter of 2009 and over the year. However, residential permits have shown a
slight decrease. Residential valuation over the quarter mirrors third quarter 2009.
Over the year, residential valuation is holding steady. Commercial valuation has
skyrocketed in quarter three and will double the 2009 total by the year’s end.
Permitting of the new Woman’s Hospital created the largest increases shown
Seventy percent
in permit valuation this quarter. The Renaissance Hotel at Bluebonnet and
Baton Rouge Magnet High School are other significant projects adding to
of the businesses
the large increase in valuation.
that participated
In the third quarter, the Baton Rouge area has experienced a 16% decrease
in new construction residential permits from the same period in 2009.
in the survey
The industrial trend this year has been the revitalization of infrastructure,
expect revenues
streamlining of processes, and modernization of facilities, which has
led to increased expenditures and efficiencies without high additions
will increase
in employment. Industrial projects this year account for approximately
by 5% or greater
$800 million in capital investment.
As of September, Bloomberg economists predicted a 2.5% growth in gross
in 2011.
domestic product for 2011, indicating a moderate strengthening of the U.S.
economy. Regional forecasts are more optimistic. New job growth is expected
to be between 0.9% and 2% in the upcoming year, according to analysis of a
survey of local businesses conducted by BRAC in conjunction with the Greater
Baton Rouge Business Report. The healthcare, professional and technical services,
and information technology and digital media sectors are expected to see job gains.
Seventy percent of the businesses that participated in the survey expect revenues will
increase by 5% or greater in 2011.
Economic Review Contributors
Renee Areng
Baton Rouge Area Convention
and Visitors Bureau
Huey Dugas
Capital Region Planning
Commission
Bob Israel
Louisiana Automobile
Dealers Association
Jerry Campbell
The Advocate
J. Michael Eades
Ascension Economic
Development Corporation
Stuart Litvin
Livingston Economic
Development, Inc.
Carey Chauvin
EBR Parish Department
of Public Works
Ken Damann
Greater Baton Rouge
Association of REALTORS®
Connie Fabre
Greater Baton Rouge
Industry Alliance
Marianne Frazee
Frazee Recruiting
Hays Owen
Baton Rouge Water Company
Drew Pearson
Latter & Blum
Rene Ragas
Our Lady of the Lake RMC
Tiffany Delapasse
EBR Parish Department
of Finance
Patty Granier
Louisiana Workforce Commission
Karen St. Cyr
Port of Greater Baton Rouge
Todd Denton
Mall of Louisiana
Chris Harrell
Regions Bank
Dr. Loren Scott
Loren C. Scott & Associates, Inc.
4
Baton Rouge Area Employment
and Unemployment ($ Thousands)*
Baton Rouge Area Regional
Spending ($ Millions)*
1,600
380
80
1,400
370
70
1,200
360
60
350
50
340
40
800
330
30
600
20
400
320
1,000
10
310
200
0
0
300
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP*
SEP
OCT
NOV
DEC
JAN
FEB
2009
09-10 Employment
Nonfarm payrolls
08-09 Employment
Nonfarm payrolls
09-10 Unemployment
Nonfarm payrolls
08-09 Unemployment
Nonfarm payrolls
MAY
JUN
Strong
Latest Statistic
Iberville Parish
Ascension Parish
Livingston Parish
East Baton Rouge Parish
Stable or Mixed
Decline
Trend
• Jobs down 1,900 over Sept 09
Nonfarm payrolls, Sep 10 (p): 367,900
Unemployed, Sep 10 (p):
30,351
Unemployment
Insurance Claims
Initial claims per week*
Weeks claimed per week*
716
10,023
Residential
Building Permits
Single-family, Q3 10
Multi-family, Q3 10
644
27
Home Sales
Average home price*
Units sold, Q3 10
$194,239
493
• Sales prices have increased 1% from Q3 09
Regional Spending
Sales & use taxes, Aug 10
Total sales, Aug 10
$54.3MM
$1.11B
• Sales tax collections as a region
have decreased 2% over Aug 09
Local HQ Stock
Performance
Price change over Q3 10:
ALB: 19.4%
AMED: (40.2%)
LAMR: 27.5%
SHAW: 2.3%
HEES: 7.0%
CRWS: 17.3%
• Stock prices have increased across
the board except for Amedisys
WTI crude oil spot*
Henry Hub natural gas*
AUG
2010
Jobs
Energy Costs
JUL
* Sales were estimated from sales and use tax collections
and rates of each taxing jurisdiction within each parish
Source: Local tax offices; BRAC analysis
Economic Vital Signs
Outlook
ARP
East Feliciana, Pointe Coupee, St. Helena,
West Feliciana, and West Baton Rouge Parishes
* September employment and unemployment figures are preliminary
estimates; all employment estimates reflect current revisions.
Source: Louisiana Workforce Commission; BRAC analysis
Indicator
MAR
$76.18/barrel
$4.28/MMBtu
Sources: Louisiana Workforce Commission; U.S. Census Bureau (New Residential
Construction); Greater Baton Rouge Association of REALTORS®; Local sales tax offices;
Yahoo! Finance; LSU Center for Energy Studies; BRAC analysis
• Unemployment in Sept at 7.8%;
well-below U.S. average of 9.2%
• Initial claims down 2.2% from Q3 09
• Weeks claimed up 4.8% from Q3 09
• Total permits have decreased by
16% compared to Q3 09
• Single-family permits have decreased
20% compared to Q3 09
• Units sold have decreased 24% from Q3 09
• Crude oil spots down $1.80/barrel
from Q2; up $8.04 from Q3 09 levels
• Gas price down $0.07 from Q2, price
is up $1.10/MMBtu from Q3 09 levels
* Q3 10 average
Q3 2010
5