Oklahoma Economic Outlook 2017

Transcription

1 Oklahoma Economic Outlook 2017 by Dan Rickman Regents Professor of Economics and Oklahoma Gas and Electric Services Chair in Regional Economic Analysis

2 U.S. Real Gross Domestic Product Growth (%): IHS Global Insight, Inc. November Forecast

3 IHS Forecasted Annual U.S. Real GDP Growth (%): Major Components U.S. Real GDP Durable Cons Nondur Cons Services Cons Res Invt Nonres Invt Federal Gov't S&L Gov't Exports Imports

4 U.S. Potential GDP Growth (%): Employment and Labor Force Growth Constraint (IHS Global Insight, Inc.) Nonfarm Emp Real GDP Civilian Labor Force Potential GDP-Smoothed

5 QCEW Annual Employment (2011=1) Arkansas Colorado Kansas Missouri New Mexico Oklahoma Texas

6 VARIABLE BEA Total Emp REGRESSIONS BEA W&S Emp QCEW Emp (March) Natural Amenity Ranking 0.41 (4.04) 0.52 (4.06) 0.48 (2.32) Rural-Urban Continuum (3.31) (3.13) (2.40) Energy State (3.45) (3.14) (5.17) Farm State 0.37 (1.04) 0.61 (1.36) 0.25 (0.34) Manufacturing State (0.15) 0.01 (0.03) (0.26) R-Squared Energy: AK, CO, LA, MT, ND, OK, TX, WV, WY Farm: IA, MT, NE, ND, SD Manufacturing: IL, IN, MI, OH, PA, WI

7 $/bbl $/mmbtu Energy Prices (Base: IHS Global Insight, Inc.; EIA): WTI Oil ($/bbl); Henry Hub NG ($/mmbtu) WTIOil-Base WTIOil-EIA HHNG-Base HHNG-EIA

8 2000Q1 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 Oklahoma Rotary Rig Count (Baker Hughes): 2000:1-2016: Oklahoma Rig Count

9 Oklahoma Energy Production (EIA): 2005:1-2016:8 (2000:1=1) M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M M07 Natural Gas Oil

10 2000Q2 2000Q4 2001Q2 2001Q4 2002Q2 2002Q4 2003Q2 2003Q4 2004Q2 2004Q4 2005Q2 2005Q4 2006Q2 2006Q4 2007Q2 2007Q4 2008Q2 2008Q4 2009Q2 2009Q4 2010Q2 2010Q4 2011Q2 2011Q4 2012Q2 2012Q4 2013Q2 2013Q4 2014Q2 2014Q4 2015Q2 2015Q4 2016Q2 2016Q4 2017Q2 2017Q4 U.S. and Oklahoma Mining Employment (%Change) US Mining OK Mining

11 US and Oklahoma Nonfarm Employment Growth Rates Oklahoma US

12 Sector Change in Oklahoma Employment (%): 2017 Contract Construction Educational Services Accommodation, Food Services, Leisure Transportation & Public Utilities Real Estate Natural Resources & Mining Admin., Support, & Waste Mgt. Financial Activities Professional, Scientific, and Technical Total Nonfarm Employment State and Local Government Federal Government Plastics and Rubber Manufacturing Health Care & Social Assistance Food Manufacturing Retail Trade Electrical Equipment Manufacturing Wholesale Trade Other Services Information Mgt of Companies & Enterprises Other Durable Goods Manufacturing Other Nondurable Goods Manufacturing Nonelectrical Machinery Manufacturing Transportation Equipment Manufacturing Fabricated Metals Manufacturing

13 2016 Sector Employment Growth Rates and Change in Growth Rates from 2016 to 2017 Mining Rates Fabricated Metals Mft Machinery Mft 10 Change in Growth Growth Rates -5 Construction

14 Oklahoma Population Growth Rates (%) P o p u l a t i o n E m p l o y m e n t Actual Growth Rate Predicted Growth Rate Relative Oklahoma Nonfarm Emp Growth

15 Oklahoma Total Nonfarm Employment Growth Rates (%) Tulsa OKC OK ROS

16 Rest-of-the-State (2015:1-2016:1 QCEW) Unweighted Average: All Counties (-1.5 percent) Lawton Metro Area (-1.1 percent) 25 Metro-Adjacent Counties (-0.2 percent) 16 Fracking Counties (-3.4 percent) 6 Mining Dependent Counties (-9.8 percent) 15 Farming Dependent Counties (-2.0 percent) 12 Manufacturing Dependent Counties (0.7 percent) 14 Government Dependent Counties (-0.3 percent)

17 Short-Run Risks Political Uncertainties (new administration) Policy Mistakes (federal, state) Worldwide Energy Glut (large new discovery in the Permian Basin)

18 Long-Run Risks Low teacher pay (End the tax cutting!) Earthquakes Lack of industry diversification Relatively less attractive to college-educated Millennials o entertainment establishments (-) o low housing prices (+) o high-tech presence, new economy sectors (-) o social tolerance (-) o good governance (-)

19 Annual Average BLS Total Nonfarm Employment (QCEW) KS NE Source: States_Presentation.pdf

20 BLS (QCEW) Nonfarm Employment year KS synthetic KS Synthetic KS- weighted average of other state outcomes; WA (0.46), MO (0.34), SD (0.2) More similar to Kansas than Nebraska in terms of industry composition (more mft and less farming than NE), educational attainment, and less rural than Nebraska

21 20 Fastest Growing of 50 Largest Metro Areas BEA Employment Growth (OKC: 8.3%; Tulsa: 6.9%) Nashville-Davidson--Murfreesboro--Franklin, TN 14.80% Raleigh, NC 14.53% Miami-Fort Lauderdale-West Palm Beach, FL 14.25% Denver-Aurora-Lakewood, CO 13.80% Houston-The Woodlands-Sugar Land, TX 13.49% Dallas-Fort Worth-Arlington, TX 13.20% Charlotte-Concord-Gastonia, NC-SC 13.12% Los Angeles-Long Beach-Anaheim, CA 12.83% Las Vegas-Henderson-Paradise, NV 12.20% Sacramento--Roseville--Arden-Arcade, CA 11.89% San Antonio-New Braunfels, TX 11.84% Atlanta-Sandy Springs-Roswell, GA 11.76% Seattle-Tacoma-Bellevue, WA 11.64% Tampa-St. Petersburg-Clearwater, FL 11.58% Salt Lake City, UT 11.39% Phoenix-Mesa-Scottsdale, AZ 11.23% San Diego-Carlsbad, CA 10.64% Portland-Vancouver-Hillsboro, OR-WA 10.63% Jacksonville, FL 9.86% Columbus, OH 9.55%

22 Thank you for your attention