But economist Loren Scott, while not claiming any inside knowledge, predicts the company will look for somewhere else to put the project, potentially in the Baton Rouge area.
If that happens, Formosa would add to the $19 billion in projects that have already been announced for the Capital Region and are awaiting a final investment decision—most of which Scott expects will move forward—on top of the $10.6 billion in work already underway.
“This is the most optimistic forecast I’ve ever put out about the Baton Rouge economy,” Scott says about the latest edition of his annual Louisiana Economic Forecast, released last week. “We are growing like crazy right now.”
Scott predicts the Baton Rouge metro will add 11,500 jobs next year (which would represent 2.7% growth) and 13,000 in 2025 (3% growth). Statewide, he projects 38,700 new jobs in 2024 (+2%) and 42,200 in 2025 (+2.1%).
The expected expansion of the region’s industrial sector fuels his optimism. While Scott expects the price of natural gas—an important feedstock for the petrochemical sector—to rise due to increasing demand for liquefied natural gas exports, gas prices likely will be much higher in Asia and Europe, which would give local plants a competitive advantage.
While Scott expects a mild national recession next year, he thinks Louisiana will be mostly unscathed, in part because the state’s durable goods sector (which would take a hit during a recession) is relatively small.
Scott predicts oil prices will average around $80 a barrel over the next two years, though he says he can envision scenarios that could drive the price as high as $140 and as low as $30.
Scott was the keynote speaker at last week’s Louisiana Business Symposium, hosted by Business Report.