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good morning and welcome i'm julio malaire president ceo of the business report and on behalf of our sponsors fishman haygood mercedes-benz of baton rouge lwcc iberia bank and wfb we'd like to welcome you to the special virtual presentation honoring the capital region's top 100 private companies and their contributions to our economy and also to hear what is in store for our region in the next 12 to 24 months as we all know 2020 has been a heck of a year we have a storm to our east this morning covered 19 storm political storms all sorts of storms but regardless of the storms that we're all facing in our businesses we know resiliency is the key resilience resilience is especially important today because the business environment is becoming more dynamic and unpredictable and you will see in a few minutes the majority of our top 100 privately held companies lead by a growth mindset that balance offensive actions like improving efficiencies and seizing new opportunities with defensive tactics of cutting back cost to prepare for the worst now before we dive into some numbers check out a message from our sponsors lwcc is louisiana loyal a mantra that drives us to be a catalyst elevating louisiana's position in america however elevating this great state is not something we can do alone there is already so much impressive work being done we have so much to be proud of lwcc celebrates champions of louisiana those relentlessly committed to making our state a better place to work and live two of our three original champions simone milaz and trey godfrey lead extraordinary non-profits making a significant impact in louisiana restore or retreat is a coastal restoration advocacy group working tirelessly to ensure our vital coastline continues to be an asset for decades to come 100 black man of baton rouge builds community by enhancing the lives of african-american youth through mentoring educational and financial literacy programs and teaching life and leadership skills join us in celebrating these champions of louisiana and showing the rest of the country the best of our state learn more at louisianaloyal.com community service is a huge part of wafb and we know the nonprofits that serve our area are facing challenges many are trying to balance and increase demand on the services and support they provide while trying to find new ways to raise funds here at wafb we're in a unique position to really bring awareness to a cause and make a huge impact currently for hunger action month we're partnered with the greater baton rouge food bank for a virtual food for fall drive to help stock their shelves as we move into fall it's really to help raise awareness but also raise funds to allow us to bridge the gap through the rest of the year and it's going to be at levels that we've not seen levels of response level of assistance so if you're in a position to help reach out to your favorite community partners and non-profits and together we can continue to make a real difference welcome back this morning before we get into our main presentation i want to take just a few moments and share with you the economic impact that our top 100 privately held companies have on our community and our region i want to start off with this first uh slide they have impacted our economy to the tune of 25 billion 711 million in change up from 23 billion 973 million in change the previous year that means that our top 100 uh companies overall grew seven and a quarter percent over the last year which is remarkable next i want you to check out the top 10 companies on the top 100 private companies list you see at the top we have blue cross blue shield of louisiana a little bit over 4 billion turner industries at 3.1 billion raising canes one love one chicken finger at a time right at 1.5 billion performance contractors 1.27 billion brown and root industrial services at a little bit over a billion mmr group 752 million uh dream motor group which owns the mercedes-benz dealerships 696 million associated grocers 673 million the excel group 635 million in the neutron group 543 million it's a significant impact that these 10 organizations have on our economy check out this next slide out of the top 100 companies 65 of them increase their revenues this past year two of them were flat and 33 realize some type of slight decline but check this out 15 out of the 100 top private privately held companies grew over 25 percent over the last year or higher and lastly i want you to check out where they're headquartered this is interesting 79 of the companies are headquartered right here in ebr 12 in ascension parish five in west baton rouge parish three in livingston parish and one in iberville parish and finally i thought i would mention that there are 12 new companies that made the list this year that were not on the list last year which means 12 were knocked out and which reminds all of us you can't take your eyes off the ball you better not take your eyes off your customers or your business in a minute we have a special segment that we've integrated this year into this presentation we're going to visit with art farv the ceo of performance contractors with over a billion in revenue over seven thousand employees but first a word from our sponsor congratulations to this year's top 100 private companies we are grateful for your commitment to our community and we're honored to join you in that mission at mercedes-benz of baton rouge we believe in the future and we're committed to help build it we believe education is a pillar for the future so we became one of the founding members of dream teachers in 2007. it's an organization that elevates and recognizes outstanding educators in the state of louisiana gwen has served on the dream teachers board for the past eight years we're very proud of the work they do year after year to celebrate our very deserving educators let me tell you it's an incredible feeling to hand over the keys of a brand new mercedes-benz to the louisiana state teacher of the year we're so grateful that we have been able to give back in a unique and meaningful way thank you for joining us on our mission to help our community fulfill their dreams and congratulations from all of us at mercedes-benz of baton rouge well welcome back and we're extremely fortunate this morning to have art farm the ceo of performance contractors joining us this morning welcome uh art thank you very much glad to be here yes well it's great to have you here and i know lauren's going to have a lot to say probably both the good the bad and the ugly a little bit later on but uh we're so honored to have you here and i put together a couple of uh questions that we'd like to hear straight from the chief executive officer of performance contractors and so let me start off with this you guys did over a billion in revenue uh this past year much of the work was out of state and so i was going to ask you first what are you seeing as far as work demand in other states compared to louisiana right now well frankly julio um there are several areas across the country that are really outperforming the louisiana economy currently uh in fact there's some recent data that shows that louisiana is actually the poorest performing state in the southeastern united states as measured by the number of hours that have been worked in using a baseline of january of 2020 just to give you some examples of louisiana in april when we bottomed out we were at a minus 60 percent of the number of hours we worked in january and currently here in in the first of september uh we're still at a minus 32 percent and those numbers are the lowest in the southeast right now this this situation was true prior to the pandemic and uh it has only gotten more of evident during the extended shutdowns that we've had here in louisiana our company quite honestly has been uh very blessed to have a more of a nationwide basis and uh we that activity has allowed us to weather the impacts of the pandemic uh much more than some of our fellow contractors that are tied strictly to the louisiana economy um most of our work in louisiana is obviously oil and gas based and and of course chemicals but outside the state we have a more of a diverse of background of clients we were more into the power and especially chemicals and even automotive and uh in other areas so let me ask you this with that in mind obviously you guys have done a great job of diversifying nationwide uh what are your expectations for performance contractors in 2021 and you know moving forward for you guys well i kind of wish you hadn't asked that question but uh quite honestly uh in all honesty we started 2020 with enough backlog to set a a company record in sales in 2020 but by june due to project delays and cancellations indefinite postponements our forecast went from record-setting to mediocre at best so we've basically been scrambling since the pandemic set in to to kind of overcome some of those losses in the backfield of that backlog and it's been kind of tough because the um the economy is not that good the markets are very tight very very very competitive and so we've had to reach out look and look all all over the country to try to do some backfill we've been somewhat successful but we still have a ways to go and quite honestly um with most of our uh work in louisiana being oil and gas related it makes it really tough here locally the the out out of state we're we we think it's going to be better in terms of the being able to pick up work but our outlook for 2021 is is not very bright it could be one of our slowest years in the last decade well let me ask you this uh the pandemic what's happening in the uh oil prices and gas prices are there any other um issues above that are impacting jobs in the activity in louisiana besides those that you just mentioned um yeah i think so quite honestly the legal climate in louisiana we feel is is a major deterrent for economic development in in louisiana tort reform quite honestly is a very big deal we made some great inroads in that in the last legislative session but there's still a whole lot more that needs to be done in that arena if louisiana truly expects to compete with our neighboring states for major capital um capital investments and the other thing i would say is our state transportation system is woefully lacking and needs needs a lot of attention to be fixed but you know these those two areas can can be fixed if the will of the people will let their elected officials know that that's important to them and those official officials take action to to improve them and i think if they do that lots of things will start falling in place you know as i've talked to other ceos like yourself uh uh i hear the same echo of the level of frustration with those two points uh but i'm always reminded that you know while we have a lot of challenges you gotta nail one at a time right and so i want to ask you if there was one thing there was one thing you could change about louisiana or the climate uh what would it be well for me right now and i've been here for a long long time but i'd have to say it would be torque reform quite honestly i feel that a fair and equitable legal climate will really uh if we get that done most of the other issues will improve almost automatically so that we've got a we've got to start stop driving jobs away from louisiana and our people out of the state we have offices in multiple states around the country and louisiana is by far the most difficult state to to conduct business in and uh we we've we just got to improve that but i will say we still have the best food in the country i agree with you there and so let me ask this we have a pretty big audience of uh business people that are engaged in the community what's one or two things that you would like to encourage them to do to get involved in in in in battling things like tort reform i think uh involvement is is the key word there so many people i find are are complacent or just don't seem to care about what's really going on in government and government really does matter and government is the people yeah you know we we elect people that's our constitutional right to elect people to represent us to make laws that we all want to abide by and if we don't go vote and if we don't elect the right people to to represent our feelings about how our state or our government federal government should be run then shame on us we're not living up to our constitutional right and uh you can't complain if you don't go vote it's my feeling i think you're right about that i want to shift gears here on you before we run out of time um there was something uh you guys just celebrated uh your 40th anniversary and i i know that uh we did a piece on you guys and and and i want to quote you for a moment here uh here's what you said when you mark your 40th anniversary you said performance is still a young company that is just getting started we have a bevy of young talent poised to assume the roles of the next generation of leaders what advice would you have for others in preparing for the next generation of leaders that's actually a very simple one for me i think you know no matter what business sector you're in a company is only as good as the people that they have working with them and so my advice is to invest heavily in upgrade training education of any type continuing education management training whatever it may be to organically grow your company mainly your company culture from within and if you do that that investment in your people uh will will pay dividends for many many years to come well art thank you so much for joining us uh today you've heard it straight straight from one of our top ceos thank you for everything that you and the performance contractors does for our community i mean our state providing jobs your philanthropy and everything else uh you guys having a tremendous impact and and thank you for uh sharing your wisdom today well thank you very much and it's a pleasure to be here and thank you for all you all do at business report thank you so stay tuned we're ready for showtime dr lauren scott when we get right back thanks [Music] hi i'm charles landry of the law firm fishman haygood 2020 has certainly been another year to test the resiliency of louisiana but i've lived and worked in louisiana long enough to know one simple fact when faced with tough situations our community unifies and works together we can't control when this virus will stop whip-sawing us or when our economy will be fully rebuilt what we can do is practice the core values that make our community strong respect courage fairness and most importantly generosity the water campus is a prime example phase one is completed and it will ultimately have space dedicated to collaborative coastal science and applied research scientists and engineers are gathering today on one campus to help solve the problems of our shifting coastlines so we can preserve how we live and work at fishman haygood we look forward to being right here with you to help make louisiana an exceptional place to work and live hi i'm john everett baton rouge president for iberia bank as you may have heard we've reached a major milestone two relationship driven banks both leaders in the industry have joined forces iberia bank and first horizon are now one company together we will deliver better technology broader lending capabilities and an expanded financial network powered by our local team that you know and trust during times like these we recognize the importance of working together to remain a resilient community together we can support each other to meet our common goal of keeping the greater baton rouge area a thriving community that we all know and love we recognize the value that small businesses bring to our community and i encourage you to support them the best way you can it's important to our local economy and to our state but now more than ever it's important for all of us together to remain strong through this economic time thank you for your ongoing trust we look forward to continuing to serve you and being better together [Music] welcome back at the conclusion of dr scott's economic forecast we have a special gift for everybody who registered today or is a b siness report insider so i want you to stay tuned as soon as his presentation is over so while our speaker needs no introduction he always insists on one no i'm just kidding for those of you that are not aware dr scott is the president of dr lawrence scott and associates an economic consulting firm whose clients include national and international firms he is one of 52 member national business economic issues council which meets quarterly to discuss issues of state national and international interests this group has experts who cover international trade washington economic policy retail trade trucking steel and chemicals he's been appointed to the economic advisory board of the u.s council on competitiveness a group made up of ceos of fortune 100 companies top university presidents and presidents of three major unions ladies and gentlemen dr lauren scott dr scott welcome thank you julio good to see you buddy thank you very much i want to start out today by thanking julio and roth to my favorite entrepreneurs uh for the development of the business reports and all the activities around it's been a great addition to our community and i want to thank our sponsors of this particular event for for uh making this possible it's very it's great i know we have a lot of people watching today and a lot of that has to do with the fact that our sponsors put up this money i want to make two other announcements before we get into this first of all this is the because of budgetary issues this is the first time in 40 years that we have not been able to get direct financial support from the from lsu to support the louisiana economic outlook so we had to go out and get underwriters and uh today we wouldn't be having this meeting we wouldn't have the outlook for the first time in 40 years had it not been for these folks and so i want you to take a moment just to look at these uh folks blue cross blue shield especially and clico who are our platinum sponsors dc home bank uh isc entergy shell and gallagher and then exxon mobil who's been our silver sponsor for years and years we just could not have done that done this without them we're very grateful for their support this year also you may remember that last year we added a co-author to the louisiana economic outlook and i promised him that i would show recognition to him uh today uh specifically so as you can see here i'm doing that and uh well i'm sorry i'm just kidding greg his name is greg upton dr greg upton who is the assistant associate professor of research at lsu center for energy studies and he's been a great addition to the team he's a very knowledgeable person in the in the energy sector one of the most knowledgeable in the state uh he has also done a lot to increase the quality of the content and also the look of the leo this year so i want to thank him he's also responsible for any errors that are remaining in the report this year that's one of the nice things about having a co-author i thought you would appreciate this picture here i think this picture pretty much summarizes what it's like for us in this cold in this shut-in environment you know we're just like we're asking we're begging the dog to let us be the one to take him out and i don't know about you but i can't believe it's september can you believe how fast time has passed matter of fact it seems like march was only about 16 years ago finally now let's let's start getting into the meat of the report today what i want to do is spend some time talking about the impact of covid on the economy and i want to start with this slide which talks about the impact on the national economy as you can see here the economy started to slide in the first quarter and then on the second quarter of 2020 uh real gross domestic product the basic measure of the output of goods and services in our economy fell by 31.7 percent now uh the bureau of economic analysis has been collecting data on real gross domestic product now quarterly for 73 years that's about 300 quarters worth of data this is the worst quarter ever since they began to collect that as a matter of fact the worst quarter before this was back in 1958 when real gross domestic product fell about 10 this is this is more than three times worse than this so this was really a huge hit to the economy then what i thought i would show you here is what the impact was uh in the worst month the month of april the first month of which we were totally shut in uh you recall in march we were only shut in for about half the month and what you first of all want to focus in was that very top number there real gross uh i mean non-farm employment in the state fell about 272 000 a drop of about 14 percent you'll notice that our unemployment rate had jumped to about 14.5 percent which is not that much different from the national economy about 14.7 percent but then what you can do is you can look down to the different industries in the state and see which industries got hit the hardest and i'm sure it's not surprising to you to learn that the hardest hit was a leisure in the hospitality area this is the area that includes the tourism business the restaurant business the hotel business and importantly for louisiana our casino business the casinos employ about 16 000 people in our state the casinos and racinos together that's the racetrack horse race tracks about 16 000 people they were totally shut down from the middle of march to the middle of june that's a lot of people to be thrown out of work so it probably doesn't surprise you this was the hardest hit that's one of the weirdest things about this downturn historically it's not the service sector service secretary typically holds us up during the downturn this is the first town term i'm aware of that was driven mainly by what was happening in the service sector and then if you look at the sector right under that box the other services sector you'll notice it also got hit pretty hard this is where your beauty parlors are this is where your barber shops are your repair shops which are all closed during that time period one of the real surprises to me is the area right above the box and that is in the health care area i thought to myself going into this hey this is a crisis in a health care area this ought to be great for the healthcare industry it was precisely the opposite of that because what happened is you know a lot of the clinics were shut down doctors offices were shut down people canceled elected surgery they were afraid to go to clinics and this is a sector that actually got hit pretty hard by this downturn uh the other sector they got really hard uh especially in our state is the one where art farv works and that is in the construction sector the construction sector as you can see was down 17 versus 14 for the state as a whole and there are three primary reasons for that one is what i call the displaced contractor effect uh if you go to the exxon refinery just north of town here uh what you'll discover is it takes about 3 500 people to run that refinery every day that's a lot of folks what may surprise you to learn is that only about 1500 or so of those are people who wear an exxon mobil shirt the rest of them wear shirts that say performance contractors turner industries etc there are a lot of contractors the biggest part of their workforce is contractors and one of the first things that they did this is a refinery look what happened to gasoline production in the united states in just a three week time period a drop of 42 percent just hammered this sector and one of the things especially that the primaries did in response to this was not to let go of the people that had on exxon bubble shirts they let the contractors go home and they tried to handle all the maintenance and repair stuff as best they could with the people that were wearing their shirts so you had this happening all across your chemical sector and your refinery sector in the state and so the good news is partly that has come back and by the way notice in this chart that the uh the gasoline production has come back it has not come back all the way still down about 7.2 percent but it's still down so in addition to that as was mentioned in the interview with art uh uh another thing that happened there was kind of combined two things that happened the construction side and that was there are a lot of projects as we talked about last year that we thought they were going to pull the trigger they're going to make a final investment decision this year and start up their construction many of those were delayed into 2021 or 2022. in addition to that a number of projects that were already underway here were either totally really slowed down as art mentioned but also some of them were totally stopped and i'll show you some examples of those in our area here and then a third thing that happened was in the turnaround areas some of the we have a lot of chemical plants we have a lot of refineries in our state and every once in a while they totally shut down their facility and they do major repair work well they did not do that this year they kept going they decided to postpone that turnaround work into next year that's going to be very important as we think about what's going to happen in 2021 and 2022 in our sector uh the construction side this is particularly important as you can see here for the baton rouge the lake charles and the new orleans area this is not very big a matter for the central northern part of the state or for the oil patch but it's very important for these two metropolitan areas now the other area which uh went down more than average was the mining sector this is where oil a gas extraction is the oil gas extraction sector as you'll see in a moment has not done very well and this is one of the primary reasons back in january the price of oil was 60 dollars a barrel and as you can see it fell all the way down into the 20s uh and of course we know what happens in louisiana when that occurs the oil and gas sector starts shutting down you'll notice uh in the i think it's the orange boxer the red box we had one day in which the price at what was actually negative i think was a negative 38 a barrel for one day and that was strictly because of some contractual issues and that only happened for one day now the good news is the price of oil has come back a bit it is now kind of ranging around between 38 a barrel which is about where it is today and about 42 dollars a barrel it's kind of level off there and there's some peculiar things happening in this industry that's going to affect the price of oil we need to be very carefully watching over the next couple of years and this is talked about in the actual louisiana economic outlook report this is a picture of the price of oil from 1980 through our forecast for 2020 and uh i taught forecasting at lsu for 30 years to mba's executive mbas and i kept telling them this is the second most difficult thing in the economy to forecast and the reason for that is that about two-thirds of the oil reserves in the world are under the lands of countries where the government's running the country not the profit system the government and you never know what they're going to do as a matter of fact that big drop that occurred in 2014 and 2015 you see on the screen there was primarily because one country the saudis decided to turn on the taps punch a bunch of oil on the market it's very difficult to forecast this now our forecast for the next two years are that the price of oil will average about 40 this year about 45 next year and about 49 in 2022 those are not good numbers to be shared with the people in home and lafayette i'll tell you because the gulf of mexico needs numbers like in the 55 range to really get going again um our primary reason for this is because the number one there's just a lot of uncertainty around this what we did is we looked at the futures market this is where people are putting millions of dollars on the line behind these contracts and uh they're they're basically saying this is the pattern the price of oil is going to follow the energy information administration also thinks it's going to go like that and so we went along with that that's the basis of which we made our forecasts for the state but you need to know that as as you can tell from the ranges we have on this chart that it could very the price could very easily do way better than this from our standpoint it could get much higher it could also go much lower there's all kinds of things that cause this to happen it's a very difficult thing to forecast we are not happy showing this to you because this is not going to be something that's really going to help pull lafayette and home out now the next thing i want to show you is how much have we improved this is really important so what i'm showing you here in the is in in the first column there is what i showed you earlier this is what things that the job drop was what was like by industry uh in april the worst month and then the what what has happened in the latest month for which we have dated and that's the month of july and that last column shows you how much we've improved how much of those jobs we've gotten back so if you look at that kind of top line there you can see we started out losing 270 almost 272 000 jobs we've gotten back 49 of those jobs now i want you to take that number 49 stick it in the back of your head and remember it for just a minute we're going to come back to it in a moment and then if you look down the column you can see how the recovery hit different sectors of the economy it was very different depending on what sector you were in so if you look at the mining sector this is again where oil and gas extraction is the mining sector actually got worse during this time period they did not have an improvement in jobs their influence actually went down and the other sector that actually went now was local governments you know local governments have to operate on a balanced budget and they've had problems with tax sales tax collections especially during this time period and as a result they have been cutting back on employment the other two sectors that uh did not perform very well one of them you might be again surprised about was the healthcare sector the health care sector has not come back people are still somewhat afraid to go to hospitals and clinics they are still postponing elective surgery the hospital and the health care sector has just not come back as fast as the rest of the economy and the other sector that hasn't come back as much as the professional and business services sector this is where the engineers are this is where the attorneys are this is where the accountants are a lot of them associated with that construction sector which has been a problematic sector as we mentioned before now uh i thought i would also show you this what has been the sector that has done absolutely the best and the one that has done absolutely the best has been state government state government has not only gotten back all the jobs that it's lost but almost more than that uh it was it was the sector that's gained all of its jobs backed plus some and they got a raise i'm going to just leave that for you to think about in your head as you look up the chart to the other sectors of the economy and what was going on there now uh i thought it would also show you what the breakdown was by metropolitan area and you can see here again that top number is the total number that uh 272 000 dropped the the not surprisingly the economy they got the metropolitan area that got hit the hardest was the new orleans area new orleans area is one of the bigger casino markets it's not the biggest but it's one of the big casino markets it's also the one that's heavily convention and tourism oriented and it's also got a lot of work that art farb does a lot of construction work in that area and these these sectors just got hammered during this time period in percentage terms the hardest hit sector was actually the hardest hit metropolitan area was actually lake charles now lake charles is the largest uh casino market in the state 5400 people work in their three casinos and one racino in their area there's also a lot of industrial construction that goes on in that area as we talked about in previous uh previous reports so it got hit pretty hardly if you look at where we are today we look at the baton rouge area uh the baton rouge area actually has done pretty well we've gotten back we were hit by about 13 versus 14 percent despite the fact that we have casinos here we have three casinos here we have a lot of construction employment here but we also have state government here and that state government sector is one of the things that kept baton rouge from getting hit as hard as some of these other areas now you want to say what has been in the improvement by metropolitan area again as you can see in baton rouge the state as a whole again there's that 49 percent number baton rouge has actually gotten back 51 percent of their jobs and i think again that's primarily because this is where state government houses where the state capital is and all the agencies and that was a sector where employment actually not only rebounded but rebounded quite a lot uh if you look down a little bit there i don't think i have this marked on this chart but look down at monroe monroe is one of those economies that's gotten back almost all of its losses uh some of the tougher areas lake charles the oil patch not doing quite as well as some other areas going along so one of the these are tough numbers to look at these are hard numbers to look at and in the face of all this stuff we also had to do homeschooling and as you well know it takes a village to raise a child but it takes an entire distillery to to homeschool it this is hard work now one of the interesting things is in homeschooling they've learned a way to teach fractions uh one-fourth one-half three-quarter and one i think this was a kind of a cool way of trying to figure this out there's been a whole lot more alcohol flowing since homeschooling started in this uh this area now when it comes to forecasting we have really two separate things we have to do we have to try to figure out first of all what's going to happen the rest of this year uh h2 if you like so we have to we have to figure that out then we have to figure out what we think is going to happen in 21 and 22. now thinking about what's going to happen just the rest of this year there are two huge uncertainties this has been the toughest forecasting market we've ever had to deal with because of the uncertainties involved we've never been through a pandemic like this before and there are two key uncertainties here we're having to deal with one of those is the vaccine there's a whole section in the report that talks about how hard they're working on a vaccine how much money has been thrown at this thing like nothing we've ever experienced before we need to hope that they're throwing a lot of money at it because if you look at how long it took the the shortest time period it took to solve the last corona problem we had which was the mumps it took four years to get a vaccine back then but that was a long time ago and a whole lot less money was being thrown at it science was a whole lot different it is today so we're very hopeful that maybe we'll get one by sometime the latter part of this year or the first quarter of next year the other big thing is the presidential election this is a presidential election that's going to radically impact louisiana depending on which way it goes uh presidential candidate biden has said that if he is elected there will be no more permitting in state wa in federal waters if there's no more uh uh permitting in federal waters then you're not going to have houma you know homer might as well close their doors port fuchsia might as well close up because that's that's that's just going to end things in the gulf of mexico uh that's going to be very bad for us i have a lot of other reasons why i would suggest that this is a very important election but just let me mention that one thing in particular now when you look at the next two years uh well uh we'll look at the out not the next two years but the output for the uh the outlook in louisiana for the next uh uh the rest of this uh this year the second half of 2020. we had to try to figure out what how fast are we going to recover and so what we thought we'd do is we'd look at what the forecasters are saying the recovery is going to be like at the national level and you see two different forecasts here one from wells fargo and the other is from consensus forecast usa and consensus forecast usa uh is made up of about 26 different forecasting firms in the country and what the average is of those forecasting firms and so what we did uh using the scriptures you know in the book of proverbs there are several scriptures in the book of proverbs about using counselors and the basic idea is the more counselors you got the wiser you're going to be so we ended up using this uh this column right here and we look at what they say is going to happen in the third and fourth quarter of 2020. if you do the math on this basically what they're saying is by the end of this year the national economy would have gotten back 72 percent of uh of what the loss was from the corona virus by 72 percent so we applied that to employment in louisiana we we think that we said we're going to use the model that says the state is going to get back 72 percent of its jobs by the end of this year do you remember the number i told you to remember and that was the 49 we've already gotten back 49 of our jobs what we're we're building our forecast on the idea that by the end of this year we've gotten back 72 percent of that and if you apply that to the baton rouge economy this is a picture of employment in the baton rouge economy from 1980 through a forecast through through 2020 and you can see that last line there that last line is uh down about 5.3 percent which is about uh about almost 22 000 jobs and as it turns out uh this would be the worst downturn that the state of louisiana excuse me that the baton rouge metropolitan area has experienced in the last 40 years in percentage terms now if you look back in the early 80s that was one of our other bad time periods but that that downturn occurred over six years this one occurred over six months so this is this was a hard hit to our area now if you look at the state as a whole uh this again is a you see all the different recessions that we've been through in the state as a whole this was also a hard one down about 5.3 percent uh for the state as a whole and uh over 100 000 jobs as you can see on the average for the year so this has been this has been uglier this has been uglier than the train wreck as it turns out as a matter of fact i think this is a pretty good picture that explains what 2020 has been like don't you think this is what our slide has been like for this year now by the way there's been a recent household survey uh conducted uh about the impacts of the uh the covet and homeschooling and that sort of thing and basically this one said are you drinking more while on lockdown and this is one of the responses i thought you would appreciate you would appreciate that now what is the outlook for 20 for the next two years as we look at 21 and 22. we base our forecast here again on what the consensus forecast looks like for 2021 and then we came up with our own forecast of uh real gross domestic product growth for uh for 2022. basically what what the forecasters are saying is this recovery is not going to be a v it's going to be more of a nike swoosh you know that swoosh on those tennis shoes it goes down but it doesn't come back up it kind of goes off like this and basically what the they're saying is it'll take uh until late 2021 or early 22 for the national economy to get back to where it was before the coronavirus hit and so we kind of used those numbers to apply to louisiana except we made some adjustments based on our oil price forecast remember that oil price forecast was not particularly good for certain areas of the state and that's going to cause us to not grow quite as fast as the national economy does when you look at the baton rouge area what we think is going to be the key thing here is the recovery of a lot of jobs that were lost simply because the coronavirus the restaurant is coming back hopefully the hotel is coming back the service sector coming back etc to back to what is normal but in addition to that the primary driver we think will occur for our area is the construction side uh driven primarily by about 6.2 billion dollars in projects out there that still have not done again what we call an fid a final investment decision if you look at the projects that are underway right now uh you can see that there's about what 4.2 billion that are already underway in our state in our metropolitan area you'll notice that i put two and purple here and these are ones clearly impacted by the covet virus and the biggest of those is the method x3 project down in gonzales area that project is a project to build produce more methanol if you read through the louisiana economic outlook there are a lot of potential methanol projects all across the state virtually every one of them has been put on hold because of how bad the methanol market is right now and this is a project that's been put on what we call a strong pause it's just been totally stopped the exxon mobil project here just north of baton rouge is one where as art talked about projects being slowed down this is one that has been slowed down uh and it's not moving as fast towards a finish as we had earlier thought now over here we have a list of about 6.2 billion dollars in projects that have been announced but have not pulled the trigger yet and again you'll notice that some of these are put in purple and part of the reason for that is those are ones we specifically know that were delayed that might have come might have started up this year but were delayed into 21 or 22. the top one on this list is the shell chemical project a very big 1.2 billion dollar project my understanding is that has been postponed for anywhere from 18 to 24 months so it may not start up until uh 2022. you'll notice another one down there the nutrient also as i understand been postponed for quite a while but uh and also there are two there called airlockheed uh that are in purple and the primary reason they're in purple is because they're associated with a methane x3 plant that you see on the other side until that one gets going again these other two will not get going uh themselves and so uh but you can still see we have a lot out there that could cause a lot of nice growth uh in the baton rouge economy in addition to that there is the turnover activity that's going to start taking place resume as we get into 21 and 22. uh this is a picture of a survey that was taken before the coronavirus hit by a connie uh favors uh group the greater baton rouge industrial alliance and you can see that big old hump you see how big that hub is that's about that's about 5 000 construction workers there primarily being put to work because of uh the turnarounds but now that has all been shifted everything has been shifted forward into 21 and 22. so this mountain has been added on top of another mountain going forward so it would not be surprising to find the construction sector in 21 and 22 going from a worker shortage problem a worker not a worker surplus problem that they have right now to a worker shortage problem because of the need to do these turnarounds as we go into next year now the other thing about what you may not be familiar that's going on here that's unusual for our area is the amount of money coming in and flood mitigation federal money's coming in flood mitigation now there are a number of these there's four or five of these one is uh 1.4 billion from the core to complete the comate diversion canal and another uh 255 million for clearing and whiting dredging waterways in this area most of that has not been spent it is still under underway there's another uh 1.2 billion in hud money for flood residency protected most of this i think none of this has been spent yet has hasn't been released yet they're going through the architecture of this at the governor's office and that's still coming up that's a lot of money to be spent over the next five years another 1.7 billion in hud restored money to help people recover from the flood only about half of this has been spent there's been some rules and regulation issues that congressman graves is trying to sort out so we can get the rest of that money spent and then there's uh uh what's called flood mitigation monies this is the hazard mitigation grant program when you find out the losses from a particular event like our 2016 flood what they do is they add on another uh what does that say 7.5 percent uh to that to help build resiliency against the next particular event that may come along and most of that is not spent yet as well now for those of you from libyan parish who are watching us today there's another 50 million in that parish to be spent on clearing and getting rid of snags and that sort of thing and only about half that has been spent so here's a lot of money being spent in our economy to deal with this flood mitigation issue now here's a really interesting point i've given you five bullet points here about the type of spending once half of that money is spent fema goes in and adjusts the flood maps and everybody's flood insurance premium goes down so that's one of the other nice things that'll be good for the baton rouge economy now and also in the construction side excuse me we have the road construction we have about two-thirds of a billion dollars in uh road lettings for our area which is up from what it was last year so even more money spent coming in from the state you can see the three main projects here if you live you're coming to baton rouge from uh going from west to east you're going to love this first one fixing the la-1 la 415 to la-1 is going to take kind of take some bleed some traffic off of the entrance to the bridge the port allen bridge replacement and then of course those who live in baton rouge know that if you come down i-10 heading towards downtown you come to that split you want to go to college drive you have to cross foreign there's a there's going to be a fly over there that's going to be built with this money uh about 360 million is going to be on the widening of the interstate that's going to be interesting to go through that that's supposed to start sometime this year the voters approved about 400 million in ebr school construction there's about 65 million occurring down in ascension parish for a coastal restoration project that they have going on down there and then move br uh that you voters passed here is going to be spending about 46 million dollars a year on the roads and ditches and that sort of thing so you see the construction sector is really going to be big here now i've shared with you a lot of statistics and a lot of statistics about cobit and i know some of you are very suspicious about coping statistics and maybe for maybe for good reasons as indicated by this conversation the wife says did i get fat during quarantine then the husband said you really weren't skinny to begin with uh the time of his death was recorded at 11 o'clock on august 31st and the cause of death was coveted so help you to understand that now by the way let me mention to you about the casinos we are not a they're not the biggest market but there are as you can see nearly uh nearly 1700 people employed in our three casinos what's kind of interesting is they are still under a 50 percent occupancy despite the fact they're in the 50 occupancy these these three casinos had nearly 5 more in revenues in july than they did the previous july i think as a matter of fact if you look at all the gambling establishments around the state despite the fact they were under a fifty percent uh limit on people revenues were up 88 i think that's what people are going to gamble folks and so that's that's very very interesting there uh in terms of other things of the construction amazon logistics as you know is building the big uh distribution center in uh the industrial plex is going to create 250 jobs many of those jobs already exist i really hope that during the ne t two years we're going to land this baby here the amazon fulfillment center this would be way bigger than the one that you see above you recall that there was some hope of using the okatana mall for this but that got torpedoed i hope that they can work that out so we can end up getting that that would be huge for us florida parish's forest services in saint helena parish is uh spending 90 million dollars on a new specialty sawmill that's going to create 95 jobs click here digital is adding about a hundred jobs and spending about three about 1.2 million on expansions and one of the really nice gains for us this year is at pennington with the bariatric and metabolic institute that's coming in you'll see it's 55 jobs which is not a whole bunch of jobs but look at the pay for these jobs this is really really a nice landing for us juan pope mike lompol is going to spend 40 million on redoing the south tower j south tower make that into condos lane memorial medical center spending uh 50 million on a four-story tower there and then hollywood casino excuse me for the call hollywood casino is one of only two casinos in the state that's going to take advantage thank you that is going to take advantage of the new rule that you can move on land instead of being on a riverboat casino so the other one is going to be over in the lake charles area so it ought to be they're going to spend about 25 million dollars to do that and plus the turnarounds that i mentioned before we think the turnarounds will generate a lot of new jobs in the construction sector what did i do go backwards i went back okay now i'm sorry let me get past this you don't hear that joke again what happened meant to click here all right the other place we expect some jobs to occur is a recovery area at our port you know we have the eighth largest port in the nation here port of baton rouge if you look at that last number that's for 2019. there was a big drop in activity at the port because of high water and uh i don't know if you can see the ship uh right the kind of the middle of the chart there it shows you the number of ships dropped fairly dramatically during this time period this particular hit the the grain elevator area when 2020 came along this was double down because not only did you have high water but you also had covet and if you kind of look at these three key players there the center for it petroleum terminal down 50 percent genesis energy down 25 to 30 drop its grain elevator down 20. what we expect to happen in 2021 and 22 is we're going to see this come back and so this will be a nice job generator for the baton rouge area now so what does all this mean for baton rouge as you can see here we have our forecast listed here we think that baton rouge will be one of only three metropolitan areas in the state to re to cap recapture all the jobs that it lost during the coronavirus problem as you can see here we think will be i think the third number three and per percentage growth and number two in absolute growth so this is going to be a good recovery for us assuming and really driven by the construction side that we mentioned earlier if you look at the state as a whole the state as a whole the picture is not not nearly as pretty uh we uh have the state gaining a lot of jobs back but because of the drag that will take place in the oil and gas extraction area of our state we think by the end of 2022 the state will still be a little over 11 000 jobs below where they were when all this code started let me finish with this picture here some of you may be familiar with this this is a picture of the chinese word for crisis you may not realize this but the chinese word for crisis is actually made up of two symbols one of these symbols stands for danger and the other symbol stands for opportunity recently i was at a uh legislative task force meeting with art and the lady got up and asked you know how are we going to adjust to all these changes that are taking place because of coving people working at home or maybe people using takeout instead of eating in russia how are we going to deal with that and my i wish i had thought about this at the time my first thought now is thank god almighty we live in the united states of america because if you lived in a place like venezuela uh you lived in some country in south america or africa or many of the countries in europe you know what you do you set up a governmental committee at a governmental committee that looks achieved this is an area where we think we ought to put more resources this is an area where we should take resources away the good news for you is you don't live in those countries you live in the united states of america the united states of america we have this really neat mechanism that takes care of this problem automatically without anybody running it and that's called the price mechanism because what's going to happen is there's a big increase in the demand for some other kind of activity in the economy like delivering food their price will go up and resources will automatically go to that area if you have another area like office space where you think you're not going to need as many resources in the future it's not doing well the price per square foot is going to go down and resource is going to leave that and they're going to go to the other area it's so neat it is so neat it is so automatic and it is so efficient it's going to do it in the best possible way thank god almighty we live in the united states of america thank you for attending today thank you lauren i started out talking about uh resiliency and i want to end talking about it it's what we need it's what we got to have and so let's continue to push forward one of the things i've learned over the last 25 years that what goes up goes down and what goes down goes up so we need to continue to innovate uh be relentless and keep pushing forward remember we don't stay positive right because things are easy we stay positive because things can be hard in life and in business and so i want to thank all of you for joining us uh today uh lauren i want to thank you for also joining us and i will also thank our sponsors that make today possible fishman haygood mercedes-benz of baton rouge lwcc iberia bank and wfb if you registered for today's event or you're a business report insider uh i want you to be on the lookout this afternoon uh you're going to get the e-edition of the 2021-2022 louisiana economic outlook digital edition it's an executive summary just for you it'll have this information plus a little bit more that lauren's done so be on the lookout it's a it's a free copy if you register today if you're a business report insider so have a great day and thank you for joining us [Music]