Chapter 24
Manufacturing in Louisiana
By Shannon Walters
Overview
Manufacturing in Louisiana is a secondary economic activity. Secondary economic activities are those activities that add value to a product through alteration or manipulation of the original product. This is compared to a primary economic activity that uses the raw material with no alterations or manipulations. Some examples of this seen in Louisiana is creating paper from lumber and changing crude oil into gasoline or heating oil for your home.
Throughout the history of Louisiana manufacturing has played a vital role in its economic growth. Over the last century there have been several trends that have developed. Early in the 20th century wood was the focus of the manufacturing in Louisiana. Wood products were the main source of manufactured goods in Louisiana until the mid 1900’s when the forests were depleted. Now that the forests have been replenished wood as again stepped to the forefront of manufactured products in Louisiana. This should continue for decades to come as tree replacement programs have been implemented to maintain the forests in Louisiana. To learn more about the companies Click Here www.wii.com
Agriculture and Petroleum Products
Agricultural products are a mainstay of Louisiana manufacturing. Everything from fruits and vegetables to cotton and rice are produced in Louisiana. These products add over one billion dollars a year to the states economy. They also are the focus of many festivals throughout the state every year adding valuable tourist dollars to the states economy.
Oil and natural gas are the next main source of economic impact on Louisiana. It is hard not to notice the industrial corridor from New Orleans to Lake Charles. Seventy Five percent of the states economic impact from manufacturing is from oil and natural gas. Click here for more information on petroleum. www.exxon.com
Why Louisiana?
Why does Louisiana see such an impact on it economy for manufacturing? There are several reasons for this. The first reason is because of the wide variety of rural and urban areas in the state. Companies have the opportunity to locate in areas that allow them to get the product supply they need and be in area that is very economical for them to locate. Transportation opportunities are another major factor in why manufacturing companies come to Louisiana. Manufacturers are able to transport their goods a variety of ways. They can ship via water, train, truck, or air. This allows for them to send the products to their distributors in a timely manner and very cheaply because each of those transportation options are competitors driving those costs down to a minimum.
Regulatory laws are another reason Louisiana sees a number of manufacturers locate in the state. Louisiana does not have the strictest regulatory laws in the nation. This allows companies to do things in Louisiana they may not be able to do in competing states.
Utility costs and water supplies provide another cost saving measure for manufactures in Louisiana. Louisiana is known nationwide to have some of the lowest utility rates in the nation. Louisiana also has one of the most abundant supplies of water in the nation. These two factors allow manufacturers to produce their goods at a lower overhead cost.
Labor is another reasons companies locate in Louisiana. Louisiana has a varied work force that attracts many companies. Louisiana is one of the few states that have a skilled work force and a vast labor force that can meet the needs of many manufacturers. Louisiana also allows for the company to relocate its workers without problems because of the amenities that many cities in the state offer its residents.
Economic Impact
What kind of economic impact does manufacturing provide to Louisiana? The state sees a 55 billion dollar impact annually from manufacturing. This ranks second in the United States. 75% of this impact comes from chemical and petroleum products, while the other 25% comes from agriculture, transportation, lumber, and other manufacturing companies.
