To: Robert Floyd (771 )
From: bourgeois
Wednesday, Jul 1 1998 8:35PM ET
Reply # of 772
something to think about
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Published on 6/26/98 Archived on 6/26/98
State's work force continues to grow
By TOM GUARISCO
Advocate business writer
How can Louisiana's economy keep growing when oil prices are down by some 25 percent
from 1997 prices?
The reason is the oil business is still creating new jobs in its quest for oil and gas in deep
water far offshore in the Gulf of Mexico, said Tim Ryan, dean of the University of New
Orleans' college of business. Labor-intensive, costly construction of deepwater oil rigs and
platforms is not affected by today's depressed prices.
Through May, the state work force grew by 2 percent, with 37,300 new jobs created in 12
months, the Department of Labor said Thursday. Oil prices are below $14 a barrel, even
after a 13 percent jump this week.
"Companies are not happy oil is selling for $13 per barrel, but they are not likely to shut
down a billion-dollar project that's not going to come on line until 2001 because prices in
1998 have gone down," Ryan said. "Those are more long-run projects."
A segment of the oil patch that is feeling the pinch is the onshore and shallow-water
production, which has slowed because of the lower prices, Ryan said. But those declines
are slight, and are far outweighed by gains created by deepwater exploration.
If anything, companies are still struggling to find skilled welders and shipbuilders to do the
abundant work they have, Ryan said.
Oil and gas has been the engine driving job creation statewide, although job growth is
diverse. Seven of eight sectors saw gains in the 12 months ended in May, while all eight
metro areas and rural areas as a group showed gains.
Baton Rouge -- East and West Baton Rouge, Ascension and Livingston parishes -- was the
second fastest-growing metro area with 3.5 percent growth. The city enjoyed gains in all
eight sectors.
The state economy kept on trucking in May. The strongest sectors were services, with
14,200 new jobs; wholesale and retail trade, with 9,000 new jobs; government, 4,800
jobs; construction, 3,700 jobs; transportation and utilities, 3,400 jobs; and mining, which
added 2,300 jobs.
More modest gains were made in finance and insurance, with 1,300 new jobs.
Manufacturing, meanwhile, was the only sector to shrink, losing 1,400 jobs.
Meanwhile Baton Rouge fared even better with its 3.5 percent growth rate.
The local economy added 9,800 new jobs, putting the city on target for its 11th straight
year of record employment.
Even though the new Mall of Louisiana opened in the past year and helped create 2,600
new wholesale and retail jobs, that sector was not the fastest growing. The city added
3,700 new construction jobs, which makes it the driving force, Ryan said.
The jobs were spread among highway projects, commercial buildings and chemical plants,
Ryan said.
"Construction spending has a good multiplier effect, which has a large impact in other
sectors," Ryan said.
The services sector added 1,800 new jobs; manufacturing, 700; finance and insurance,
400; transportation and utilities, 300; government, 200; and mining, 100 new jobs.
"I don't see anything on the horizon that in the next couple of years is likely to turn this
around," Ryan said. "I guess we could say if oil prices stay at $13 for two years it might
turn the overall economy downward, but I don't think that's likely to happen."
All cities added jobs through May, as did the rural parishes as a group.
The fastest growing metro area was Houma, with a 6 percent growth rate, thanks largely to
the oil and gas industry. Baton Rouge's 3.5 percent rate was followed by Lafayette and
Shreveport, each with 2.5 percent; Alexandria, 2.1 percent; Lake Charles, 1.5 percent;
Monroe, 0.7 percent; and New Orleans, 0.4 percent. Rural areas as a group enjoyed 2.7
percent growth.
In May the state jobless rate was 5.3 percent, down from 6.3 percent a year ago. The
national unemployment rate was 5.5 percent, compared with 4.8 percent in 1997.
The Baton Rouge jobless rate was 3.9 percent in May, down from 4.8 percent a year ago.
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