Recent data from the Louisiana Workforce Commission revealed that over the past year, construction was the fastest growing sector by employment in Louisiana.
The construction industry added 7,000 jobs in the state between March 2015 and March 2016. It was the largest net increase of any sector, represented a gain of 4.32%, and was the fifth consecutive over-the-year increase. Within the sector, non-residential building construction jobs grew by 17.9% while heavy and civil engineering construction jobs grew by 7.6%.
Al Bargas, president of the Pelican Chapter of the Associated Builders and Contractors in Baton Rouge, says much of the recent job growth has been fueled by large industrial projects in the southern part of the state. Louisiana has been in an industrial renaissance in the past few years with more than $100 billion worth of chemical plant expansions and construction projects.
While these projects have provided a tremendous boost to the construction industry, Bargas says they're "starting to slow down." Particularly in the Lake Charles market, some of the plants aren't being constructed as quickly as they had been forecast. In response to lower oil prices, Sasol announced it was delaying final investments and slowing construction on its $8 billion plant in Lake Charles.
Bargas says most job number declines from those projects have been offset by turnaround projects and that Louisiana will "always" have a high demand for plant construction and maintenance jobs. "There is still big demand [for workers] across the board as the many people in the skilled trades are getting ready to retire. That in and of itself is driving demand," he says.
While the numbers look rosy, some in the industry say they can be deceiving. Ken Naquin, CEO of the Louisiana Associated General Contractors, says although the industrial construction sector has experienced job growth, "there hasn't been growth anywhere else in the industry." Naquin says a lack of funding and commitment for infrastructure projects in the past year has led to a fewer project starts. Naquin says many contractors are looking for work in the industrial sector or in neighboring states.
The construction industry is now anxiously waiting for state lawmakers to finalize the 2017 construction budget which could have a shortfall of up to $1 billion. Louisiana is in the midst of a financial crisis due to high expenditures and dwindling tax revenues impacted by the falling price of oil.
Naquin says any final version of a construction budget will likely mean less funding for infrastructure projects in 2017.
"We are struggling. We do have a commitment that there is going to be some infrastructure addressed at some point in time but the question will be how much and when," says Naquin.