I’m being asked more frequently about the oil and gas industry’s impact on the local economy and where the economy is headed. As we continue to see adjustments in the community due to the downturn in the energy sector, the desire to get those questions answered increases.
I don’t have a crystal ball that can provide definitive answers for us. What I can offer you is historical insight, current analysis and a hopeful vision for the future based on statistics and information gleaned from our relationships with local business and industry leaders and recognized economists.
A lot of us, including myself, lived through the downturn of the ’80s. The knowledge we gained by living that reality has no doubt shaped how we are reacting to the current downturn. Certainly the biggest lesson we learned was the importance of economic diversification with the energy sector, not away from it. Before the ’80s oil bust, 72 percent of the local GDP was tied to the energy sector, where that number is 45 percent today. Similarly, as much as 19.6 percent of Lafayette’s employment was in the mining industry. For the past decade, mining employment has averaged 10.4 percent.
The biggest assets that will see us through these tough times are our people and our attitude. The difference between a bad economy and a terrible economy is attitude. We are a community with a strong work ethic and an innovative spirit. Our attitude has as much to do with our success as outside economic factors do; however, positivity easily gets swept aside when so many influencers in the community constantly focus on negativity. There are businesses expanding during this downturn. The technology sector is growing leaps and bounds in Lafayette. Additional national retailers are preparing to enter the market in the coming months. Now is not the time to panic.
Now is the time to help one another by sharing our success and by advancing our community’s assets.
The local economy is an intricate web of businesses that rely on each other for products, services and customers. When a predominant industry hurts, other sectors will eventually be impacted as well.
Not surprisingly, low oil and gas prices are the predominate cause of the job loss we’ve seen in the past year. Job losses in the energy industry have triggered job losses in other industries. In 2015, we began to see declines in construction and manufacturing employment. In 2016, layoffs are likely to reach other industries such as retail, leisure and hospitality, and personal services.
The positive? There are numerous opportunities along the I-10 corridor from Lake Charles to Baton Rouge for our displaced energy, construction and manufacturing workers and for our businesses. Lake Charles has added 9,500 jobs since November 2013 — 5,100 of those jobs are in construction. The Baton Rouge region has added 19,200 jobs since November 2013 — 10,400 of those jobs are in construction. Oil industry skill sets are often easily transferable to the construction industry.
On Feb. 19, LEDA and the Cameron Parish Police Jury will host a seminar, Business Opportunities in Cameron Parish, for local contractors, construction companies and support operations to learn about opportunities available during the construction phase of the five announced liquefied natural gas projects in Cameron Parish. Representatives from Commonwealth LNC, Delfin USA, G2 LCG, SCT&E LNG and Venture Global LNG will share information about each company’s project, timeline, and vendor/contractor needs and requirements.
LEDA is working with our partners at Louisiana Workforce Commission and One Acadiana to plan an Industrial Trades Career Fair on Thursday, March 3. Representatives from the contractors for petrochemical projects in the Lake Charles and Baton Rouge areas, along with other construction contractors, will be in attendance seeking to fill numerous positions including construction laborers, riggers, welders, fitters, steel erectors, millwrights and machinists. The Louisiana Workforce Commission is already referring job seekers who were laid off from the energy industry to the recruitment contacts with each of these contractors.
The petrochemical projects locating in southwest Louisiana offer numerous opportunities for our community in a time when many companies and individuals are facing economic uncertainty in the wake of the energy downturn. LEDA will continue to work with our allies in the region and these companies through the planning, construction and operation phases to maximize the local economic impact of these projects.
The truth is, who knows the truth? There are conflicting reports daily and so many uncertain factors. What I do know is we need to let the facts, not perception, dictate our attitude. As a whole, the Lafayette economy is more diversified and better able to handle this downturn — after all, we’ve been through it before.
Gregg Gothreaux is president and CEO of the Lafayette Economic Development Authority.