November 3, 2022

Over The Next Two Years, Lake Charles Is Expected to Grow Economically

Over The Next Two Years, Lake Charles Is Expected to Grow Economically

In the past two years, Lake Charles has been hit with a series of setbacks. First, there were pandemic restrictions that changed and slowed normal proceedings, and then tumultuous natural disasters struck the area. The local economy has been pummeled as a result, but according to this article from The Advocate that details an economic forecast released by the State of Louisiana recently, things have finally begun to show signs of turning around.

In his annual report, economist Dr. Loren Scott predicts that over a period of the next two years, the Lake Charles area will be the fastest-growing area in Louisiana. When asked about his prediction, Dr. Scott said, “the total percentage improvement is, actually, remarkably large,” and he also indicated a projected 7% increase in employment growth over the next two years.

The Lake Charles metropolitan area, which comprises both Cameron and Calcasieu Parish, has seen some growth over the years, but it still has a lot of “catching up to do” in order to account for much of the dramatic growth that’s projected for the area over the next few years.

Other areas of the state have been able to recoup most of the employment losses from the pandemic, but Lake Charles is still second only to Houma in terms of jobs lost. They both slowed their recovery process by dealing with Hurricanes Laura and Ida in 2020 and 2021. Today, the employment rate in the Lake Charles area remains at 57%, which is below the pre-pandemic employment rate.

Dr. Scott, who has done research on natural gas and petrochemical construction projects, predicts an estimated $36 billion worth of capital spending in the Lake Charles Metropolitan area to be made by Spring 2023, which will be attributed to final investment decisions on construction projects. Essentially, by 2023, large construction projects in the natural gas and petrochemical sector, which are expected to carry much of the area’s projected growth, will create a significant demand for construction workers.

Not all of that demand will be met locally, but Dr. Loren Scott argues it will still provide a much-needed jumpstart to the local economy, thus providing a much-needed huge jolt. Temporary construction jobs and the much-lower permanent jobs created by these projects in the region will, in turn, stimulate other economic sectors, primarily in the areas of retail, leisure, and hospitality.

Even though other sectors struggled at first due to the restrictions brought on by a pandemic and later because of the population loss that came as a result of Hurricanes Laura and Ida in 2020 and 2021, respectively, the oil and gas industries have been able to provide a steady stream of tax revenue and employment for Lake Charles these past two years. Dr. Loren Scott said, “they’ve got a lot to recover from and because they have a lot to recover from, that’s going to boost their numbers up.”

Jim Rock is the Executive Director of the Lake Area Industry Alliance, a representative of the energy and petrochemical companies operating locally, and he commented on the resilience of the oil and gas industries by saying, “their resiliency is what distinguishes them. The sales taxes paid, the property taxes paid, they’re very constant, very dependable.”

Often overlooked for its potential impact on the region’s economy, the Chennault International Airport is also poised for significant growth in the next few years. Chennault International Airport is not a transit hub for passengers; instead, it is a maintenance resource that services and repairs airplanes while also serving as an “overhaul site” for airplanes in the area.

Northrop Grumman and LandLocked Aviation are currently in discussions to create contracts that would allow them to hire 375 new employees for their Lake Charles operation. In order to help with the projected economic growth, there are expected to be some major changes made in the regional workforce housing stock, a process that has been brought about due to the delaying of federal aid.

For more Louisiana-related articles, click here.

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