Oklahoma Economic Outlook 2015 by Dan Rickman Regents Professor of Economics and Oklahoma Gas and Electric Services Chair in Regional Economic Analysis http://economy.okstate.edu/
October 2013-2014 Nonfarm Employment Growth Rates (%) Washington New Hampshire Montana North Dakota Minnesota Vermont Maine Oregon Massachusetts Idaho South Dakota Wisconsin New York Wyoming Michigan Rhode Island California Nevada Utah Colorado Nebraska Kansas Iowa Missouri Illinois Pennsylvania Ohio District of Columbia Indiana West Virginia Virginia Kentucky New Jersey Delaware Connecticut Tennessee North Carolina Maryland Arizona New Mexico Oklahoma Arkansas South Carolina Mississippi Alabama Georgia Alaska Hawaii Texas Louisiana US : 2.0 OK : 2.24 Florida -1.00 to 0.75 0.75 to 1.50 1.50 to 2.50 2.50 to 5.10
Employment Growth Patterns (October 13-14) Energy states had about 0.2 percent faster growth (AK, CO, LA, MT, ND, OK, TX, WV, WY) 0.5 percent per change in natural amenity rank on a 1-7 scale by USDA Economic Research Service: o CO-average amenity rank 5.4; OK-average amenity rank 3.7 (about U.S. average) o implies about 0.8 percentage point lower growth relative to Colorado Manufacturing states 0.2 percent lower growth (IL, IN, MI, OH, PA, WI) Farm states 0.3 percent faster growth (IA, MT, NE, ND, SD)
Oklahoma Energy Production (natural logarithms) N a t u r a l G a s O i l 3.6 3.65 3.7 3.75 3.8 3.85 3.9 3.95 4 4.05 4.1 5 5.05 5.1 5.15 5.2 5.25 5.3 5.35 5.4 5.45 2000M01 2000M06 2000M11 2001M04 2001M09 2002M02 2002M07 2002M12 2003M05 2003M10 2004M03 2004M08 2005M01 2005M06 2005M11 2006M04 2006M09 2007M02 2007M07 2007M12 2008M05 2008M10 2009M03 2009M08 2010M01 2010M06 2010M11 2011M04 2011M09 2012M02 2012M07 2012M12 2013M05 2013M10 2014M03 2014M08 Natural Gas Oil
$/bbl $/mmbtu Energy Prices (IHS Global Insight, Inc.): West Texas Intermediate Oil (WTI) and Henry Hub Natural Gas (PNGHH) 110 5.5 105 100 5.0 95 4.5 90 85 4.0 4.0 80 77.5 81.1 3.5 75 70 71.9 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 WTI PNGHH 3.0
U.S. and Oklahoma Mining Employment Growth (Annualized Rates) 15% 10% 5% 0% -5% -10% U.S. Mining OK Mining
2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1 2019Q3 2020Q1 2020Q3 2021Q1 2021Q3 2022Q1 2022Q3 2023Q1 2023Q3 2024Q1 2024Q3 US and Oklahoma Nonfarm Employment Growth Rates (%) 4 2 0 1.2 0.8 0.6-2 -4-6 -8 US Nonfarm Emp OK Nonfarm Emp
Sector Change in Oklahoma Employment (%): 2015 Other Durable Mft Machinery Mft Administrative and Support Services Construction Fabricated Metal Mft Leisure and Hospitality Transportation Equipment Wholesale Trade Health Services Total Nonfarm Education Services Local Govt Management of Companies Mining Finance & Insurance Retail Trade Other Nondurable Mft Transportation and Utilities State Government Electrical Equipment Mft Real Estate Srv Federal Govt Professional, Scientific and Technical Srv Other Services Plastics and Rubber Mft Food Mft Information Services 1.20 1.85-4 -2 0 2 4 6 8 10
Sector Change in Oklahoma Employment (Jobs): 2015-1,000 0 1,000 2,000 3,000 4,000 5,000 6,000 Administrative and Support Services Health Services Leisure and Hospitality Construction Local Govt State Government Machinery Mft Other Durable Mft Retail Trade Wholesale Trade Fabricated Metal Mft Mining Finance & Insurance Transportation and Utilities Education Services Transportation Equipment Management of Companies Professional, Scientific and Technical Srv Other Nondurable Mft Federal Govt Real Estate Srv Other Services Electrical Equipment Mft Plastics and Rubber Mft Food Mft Information Services Total Nonfarm Jobs 30,798
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Oklahoma Population Growth Rates (%) 1.4 2.5 P o p u l a t i o n 1.2 1 0.8 0.6 0.4 0.2 0.9 0.75 0.3 2 1.5 1 0.5 0-0.5-1 -1.5 E m p l o y m e n t 0-2 Actual Growth Rate Predicted Growth Rate Relative Oklahoma Nonfarm Emp Growth
Components of Cumulative Population Growth: 2000-2009 (does not reflect 2010 Census) and 2010-2013: %population growth per year 1.8 1.6 1.4 1.2 0.41 0.79 1 0.8 0.6 0.4 0.2 0.34 0.61 0.12 0.27 0.17 0.47 0.49 0.26 0.13 0.41 0.24 0.72 0.13 0.18 0.21 0.64 0.60 0.21 0.11 0.46 0 U.S. ('00-'09) U.S. ('10-'13) Okla ('00-'09) Okla ('10-'13) OKC ('00-'09) OKC ('10-'13) Tulsa ('00-'09)Tulsa ('10-'13) Natural Increase International Migration Domestic Migration
Oklahoma Major Metro Total Nonfarm Employment Growth Rates (%) 4 3 2 1 0-1 3.0 2.35 1.88 1.19 1.61 0.83 0.90 0.56 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024-2 -3-4 -5 Tulsa OKC OK ROS
Forecast Risks Oil prices fall further: slowing economic growth worldwide causing slow growth in demand for oil, strong domestic supply Oklahoma econometric model: mining sector wage and salary employment multiplier of approximately 1.6 (about 27% of all net nonfarm job growth attributable to energy sector from 2010-2014) Weakness in the housing market (slow household formation: limited access to mortgage debt, student loan debt); labor force does not bounce back
Alternative Scenarios: Oklahoma Nonfarm Employment (%) (15% probability each) 2.5 2 0.05 0.18 0.14 0.17 0.16 1.5 1 1.79 0.96 0.78 0.27 0.38 0.34 0.23 0.46 0.37 0.5 0.74 0.90 0.85 0.44 0.45 0.81 1.21 0 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 IHS Pess Lower Oil Prices IHS Base
Thank you for your attention