The Oklahoma economy is expected to see continued growth in 2013 as it bounces back from the effects of the national recession, an Oklahoma State University economist said Wednesday in his annual forecast.
Dan Rickman, Regents Professor of Economics at OSU, estimates 26,600 jobs will be added in Oklahoma in 2013. The strongest growth is expected in professional and business services, with 5,000 jobs, and construction, which could add 4,000 jobs. Other sectors with robust employment growth are state and local government; leisure and hospitality; and wholesale trade.
Rickman said state employment growth will slow to 1.7 percent next year, down from 2.5 percent this year. He forecast national job growth of 1.5 percent in 2013, up slightly from 1.4 percent growth this year.
“Employment growth across the nation has become much more even in recent months and Oklahoma's growth is expected to only slightly exceed the nation's growth in the upcoming year,” Rickman said. “Energy-related employment appears to have peaked with the moderation in oil prices. Other states hard hit by the recession have begun to recover more robustly.”
The Oklahoma City metropolitan area is expected to see a 2.3 percent increase in employment next year, according to Rickman's forecast. That's down from 2.8 percent growth in 2012.
Rickman said employment in the mining sector, which includes oil and gas companies, is expected to contract slightly after a period of rapid growth. Natural gas prices declined and have slowly recovered, while oil prices have moderated, he said.
“Those price declines have worked their way through the economy and slowed growth in the sector,” Rickman said. “I wouldn't call it weakness, but it's been very strong and it's peaked. It's kind of flattened out on us.”
Among counties, he said, employment growth is expected in pockets of the state that aren't heavily dependent on farming. The strongest growth will come in counties with energy development and manufacturing. Weak growth is expected in small counties that are adjacent to metro areas, as well as counties that have had persistent poverty.
Rickman said Oklahoma attracted new residents from recession-battered states in 2009 and 2010. The largest share came from California, followed by Texas, Missouri and Kansas. Also ranking high were Florida, Nevada and Illinois, according to his analysis of tax return data from the Internal Revenue Service.
“The pattern I see is that those people were mostly coming from states that were not doing as well,” Rickman said. “These are states that at the time were suffering from the bursting of the housing bubble — California, Florida, Nevada. Also, there was migration from states like Illinois and Michigan, where the manufacturing sector was hard hit.”
He said most forecasters expect a deal will be struck between Congress and President Barack Obama over several tax increases and spending cuts that would go into effect at the end of the year.
While the term “fiscal cliff” has been used as a shorthand way to describe the situation, Rickman said a better term might be “fiscal slope.” Even if no deal is reached, the effects would be spread out over the year, he said.
“It would take any growth we expect next year and wipe it out, and possibly put us into a mild recession,” Rickman said of the economy if no deal is reached. “Any growth in employment we would have in Oklahoma would be gone. There is a one-year impact that is pretty dramatic if we went through that. It could be a mild recession rather than a slow recovery, but it's not cataclysmic.”