Why jobs recovery in Baton Rouge may be lagging peer cities | Business

Baton Rouge is lagging markets of similar size in one key indicator in its economic recovery — jobs. 

Since March 2020, Baton Rouge has recovered 92.3% of the jobs lost to the pandemic, according to a Baton Rouge Area Chamber analysis of Bureau of Labor Statistics data through January. The region isn’t expected to fully recover jobs lost during the pandemic until mid-2022.

“We have been more reliant on construction than many of our peers,” said Andrew Fitzgerald, senior director of business intelligence at the chamber. “It’s a combination of delayed expansions and maintenance not being allowed on-site because companies are wary of third-party contractors being on-site.”

Through January, construction had 7,400 fewer jobs than last March, and remains 15.6% short compared to pre-pandemic levels. In Baton Rouge, construction jobs are often contractors working inside of petrochemical plants and industrial sites. Those jobs have not returned as swiftly, and plant expansions have not kept pace with prior years.

The Baton Rouge Area Chamber has been tracking the economic recovery in the Capital region since the coronavirus pandemic started and related business restrictions began. 

While manufacturing was considered an essential business and was not forcibly closed during the pandemic, many plants began cost-cutting of contract labor, and maintenance projects were pushed back. Many plants also reduced the number of workers on-site to curb to the spread of the virus. 

Since then, some maintenance projects are back on track, but overall contractor employment might not increase during the first half of the year. The majority of industrial plant managers told the Greater Baton Rouge Industry Alliance they don’t expect any changes to contractor employment in the next six months, while 10% expect to lay off contractors through June.

In Baton Rouge, the leisure and hospitality sector still had 3,700 fewer jobs than last March. Manufacturing was down 2,300 jobs; professional services, 3,300 jobs; education and health care, 2,600 jobs; trade, transportation and utilities, 900 jobs; and government, 300 jobs. 

The number of higher-wage jobs are back to pre-pandemic levels, but there are 15% fewer low-wage jobs in the market, or those that pay $27,000 each year or less, according to the BRAC analysis.

In general, though, the economy is recovering roughly as expected.

The impact of a Phase 3 easing of business restrictions and an uptick in vaccinations statewide could become evident with more recent data. The federal coronavirus relief package is projected to trickle down across the economy, which may shift it “into high gear a lot sooner than people expect,” Fitzgerald said. Early indications, such as weekly new unemployment filings, have dropped in recent weeks as well. 

“I think that in the next two months we’re going to be seeing even more job recovery, especially in leisure and hospitality; hopefully in construction too,” he said. “We’re waiting for the data to catch up with where we are at right now. What happened in January is a lot different than where we are in March.”

Baton Rouge did recover jobs faster than the New Orleans metro area, which has recovered 91.4% of its jobs, but is  behind Lafayette, which saw 93.8% of jobs return. The Capital region also lagged peer cities across several other southern states such as Alabama, Arkansas, South Carolina and Kentucky. 

For example, the jobs recovery in Birmingham, Alabama, has been particularly strong since the pandemic began. It has 98.4% of its jobs back as of January compared to March 2020. 

While Alabama’s coronavirus restrictions largely mirrored those in Louisiana with mask mandates, nonessential business closures and even curbing alcohol sales at 11 p.m. between July and November, Alabama has reopened its economy more swiftly than Louisiana.

By early April, Alabama expects to let its mask mandate expire. Alabama also allocated $303 million to small businesses in two rounds of a statewide grant program of up to $20,000 each. A similar program in Louisiana doled out $262 million, of up to $15,000 for businesses. 

Alabama’s manufacturing sector is less dependent on the oil and petrochemical industry than Louisiana as it has more distribution hubs and automakers. Grocery delivery company Shipt, which saw an uptick in demand during the pandemic, is also based in Birmingham and owned by Target Corp. 

“In South Carolina, the metro areas have been doing better there the entire time. Well, places like Hilton Head were open during the entirety of the pandemic; they still allowed tourists while their restaurants and bars were open,” Fitzgerald said. “In terms of hospitality, there might be something to that.”

Other capital cities also fared better so far: Little Rock, Arkansas, has recovered 96.8% of its jobs; Greenville, South Carolina, 94.9%; and Louisville, Kentucky, 94.4%. All of those states have fewer coronavirus-related restrictions than Louisiana, according to a nationwide ranking.

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