Future remains bright for state's economy
Strong job growth and healthy energy sector continue to bolster market
Future remains bright for Oklahoma's economy

By Debbie Blossom

Published: August 7, 2008

MIDWEST CITY — A midyear review of Oklahoma's economic health shows even seasoned forecasters weren't as bullish as they could have been on projecting the state's resilience amid a languishing national economy.

"As it turns out, we weren't optimistic enough,” said Mark Snead, an Oklahoma State University research economist and director of the Center for Applied Economic Research at OSU's William S. Spears School of Business. "This is a fun time to be in Oklahoma. This is as good as it gets.”

Snead presented his August forecast update Wednesday at an Oklahoma City Economic Roundtable meeting at Rose State College in Midwest City.

And Oklahoma, according to Snead, is on a roll.

While the state has slowed during the first two quarters of 2008, Oklahoma's more stable housing market, stronger job growth and fewer credit issues have kept it ahead of the national decline and most nonenergy states, the data shows.

Although oil and gas production is flat and drilling is only a fourth of what it was in the early 1980s, the industry has fueled a hiring spike and a "mini oil boom” that is adding between 6,000 and 7,000 jobs a year and pushing average wage and salary range to $100,000 a year, Snead said.

"Every aspect of oil and gas make it our most dominant industry ... it's having an important impact.”

Oklahoma's job growth is also brighter than the national picture. The state ranks sixth in terms of regional job growth. It added 22,500 jobs last year and has a job growth rate of 1.4 percent. The strong showing is mostly due to the energy sector.

"We're growing 1 percent faster than the national rate,” he said. "I believe it would take a very severe recession at the national level to pull job growth.”

Wholesale trade and real estate are the only sectors with expected job losses this year, and consumer driven service sectors continue to add jobs. Manufacturing remains strong, although job gains are from energy-related companies.

Data show the state's population is growing faster than the U.S. rate as people move from out of state to metro areas and from metro areas into rural areas. Oklahoma also is benefiting from the expansion of tribal gaming, which is dominating the economies of some cities, such as Bartlesville, Ponca City and Shawnee.

Oklahoma City's outlook remains quite positive, propelled by oil and gas industry hiring and more jobs in the services sectors, Snead said. Only Tulsa is showing some weakness, he said. Although strong in 2007, Tulsa's economy more resembled the national economy so far this year. "My best guess is that this data is real, and Tulsa has downshifted,” compared to Oklahoma City, he said. "Tulsa will be the weaker partner the rest of this year.”

Snead said OSU's 2009 economic outlook will be released in November and will debut an energy model that will offer a comprehensive view of how energy is affecting the state's economy.

Economic Roundtable member Charles Johnson, vice president of InvesTrust, said Snead is invited every year to present OSU's economic model, which was started years ago.

"He does an outstanding job,” Johnson said.

University of Oklahoma economist Bob Dauffenbach's research will also be presented later this year, Johnson said. "We try to get the OSU and OU model each year.”

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