Oklahoma Economic Outlook 2014

Transcription

1 Oklahoma Economic Outlook 14 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. Forecast)

3 Quarterly U.S. Real GDP Growth (% Annualized Growth Rates) Q1 1Q 1Q3 1Q4 13Q1 13Q 13Q3 13Q4 14Q1 14Q 14Q3 14Q4 15Q1 15Q 15Q3 15Q4 %ΔU.S. Real GDP

4 percent Annual U.S. Real GDP Component Growth U.S. GDP Durable Nondurable Services Consumption Consumption Consumption Res'l Inv't Nonres'l Inv't FedGov't S&LGov't Exports Imports

5 U.S. Employment Growth (IHS Global Insight, Inc.) %Change U.S. Nonfarm Payroll Employment (millions) -5

6 $/bbl $/mmbtu Energy Prices (IHS Global Insight, Inc.): West Texas Intermediate Oil (WTI) and Henry Hub Natural Gas (PNGHH) Q1 1Q 1Q3 1Q4 13Q1 13Q 13Q3 13Q4 14Q1 14Q 14Q3 14Q4 WTI PNGHH.

7 percent Interest Rates (IHS Global Insight, Inc.) Treasury (1 year) Mortgage Rate (3 year) Fed Funds

8 U.S. Forecast Risks (IHS Global Insight, Inc.) Uncertainty over federal fiscal policy: consumer confidence holding up okay o we have a long-term debt problem with entitlement spending and most Bush tax cuts made permanent, not a short-term problem Risk of further slowing of growth in developing countries: Brazil, China and India Additional financial problems in the Eurozone, Greece exiting The risks combined, contribute to a percent probability of the recovery stalling

9 State Total Employment Growth 11-1 (U.S. Bureau of Economic Analysis) US=1.86% OK=.%

10 Metro PCPI Growth Odessa, TX 1.36 Midland, TX Hanford-Corcoran, CA Clarksville, TN-KY Elizabethtown, KY Peoria, IL Waterloo-Cedar Falls, IA San Jose-Sunnyvale-Santa Clara, CA Williamsport, PA Farmington, NM Dubuque, IA Columbus, IN Victoria, TX Tulsa, OK Fairbanks, AK Oklahoma City, OK Lawton, OK Salinas, CA Waco, TX Kennewick-Pasco-Richland, WA St. George, UT Tallahassee, FL Stockton, CA New Orleans-Metairie-Kenner, LA Carson City, NV.7 36 Myrtle Beach-North Myrtle Beach-Conway, SC McAllen-Edinburg-Mission, TX Pascagoula, MS 363 Lubbock, TX Las Cruces, NM Rochester, MN Gulfport-Biloxi, MS.9 Metro Population Growth Hinesville-Fort Stewart, GA 4.14 Kennewick-Pasco-Richland, WA Austin-Round Rock-San Marcos, TX 3. 4 Midland, TX.41 5 Raleigh-Cary, NC.31 6 McAllen-Edinburg-Mission, TX.8 7 St. George, UT.7 8 Warner Robins, GA. 9 Charleston-North Charleston-Summerville, SC.16 1 Odessa, TX Myrtle Beach-North Myrtle Beach-Conway, SC.1 1 El Paso, TX.9 13 Yuma, AZ.5 14 Savannah, GA.3 15 Provo-Orem, UT. 35 Oklahoma City, OK Tulsa, OK Lawton, OK.3 35 Wheeling, WV-OH Pittsfield, MA Anniston-Oxford, AL Grand Forks, ND-MN Binghamton, NY Bay City, MI Johnstown, PA Mansfield, OH Danville, VA Ocean City, NJ Flint, MI Wichita Falls, TX Steubenville-Weirton, OH-WV Pine Bluff, AR Farmington, NM -1.5

11 Change in Oil and Gas Jobs: ave(1:11)-ave(1:9) Cimarron Texas Beaver Harper Woods Alfalfa Grant Kay Nowata Washington Craig Ottawa Ellis Woodward Dewey Major Blaine Garfield Kingfisher Noble Payne Logan Osage Pawnee Creek Tulsa Delaware Rogers Mayes Wagoner Cherokee Adair Roger Mills Beckham Greer Harmon Jackson Custer Washita Kiowa Tillman Caddo Comanche Cotton Lincoln Okmulgee Muskogee Canadian Oklahoma Okfuskee Sequoyah Mcintosh Haskell Cleveland Pottawatomie Seminole Grady Mcclain Hughes Pittsburg Le Flore Latimer Garvin Pontotoc Coal Stephens Murray Atoka Pushmataha Carter Johnston Jefferson -1,3 to to 5 51 to 1 11 to 3,5 Data Source: Economic Modeling Specialists International (EMSI) Love Marshall Bryan Choctaw Mccurtain

12 State Total Nonfarm Employment Growth (U.S. Bureau of Labor Statistics: October 1-13) -1. to.8.8 to to to 4.47 US=1.55% OK=.95%

13 Baker-Hughes, Inc. Oklahoma Rig Count: Oil Nov'11-Nov'1 Oil Rigs Nov'1-Nov'13 Oil Rigs

14 Jan- Jun- Nov- Apr-1 Sep-1 Feb- Jul- Dec- May-3 Oct-3 Mar-4 Aug-4 Jan-5 Jun-5 Nov-5 Apr-6 Sep-6 Feb-7 Jul-7 Dec-7 May-8 Oct-8 Mar-9 Aug-9 Jan-1 Jun-1 Nov-1 Apr-11 Sep-11 Feb-1 Jul-1 Dec-1 May-13 1, Oklahoma Crude Oil Production (thousands of barrels): EIA 1, 8, 6, 4,, Oklahoma Crude Oil Production (thousands of barrels)

15 Baker-Hughes, Inc. Oklahoma Rig Count: Natural Gas Nov'11-Nov'1 Gas Rigs Nov'1-Nov'13 Gas Rigs

16 Jan-1 May-1 Sep-1 Jan- May- Sep- Jan-3 May-3 Sep-3 Jan-4 May-4 Sep-4 Jan-5 May-5 Sep-5 Jan-6 May-6 Sep-6 Jan-7 May-7 Sep-7 Jan-8 May-8 Sep-8 Jan-9 May-9 Sep-9 Jan-1 May-1 Sep-1 Jan-11 May-11 Sep-11 Jan-1 May-1 Sep-1 Jan-13 May-13, Oklahoma Natural Gas Gross Withdrawals (MMcf): EIA 18, 16, 14, 1, 1, 8, 6, 4,, Oklahoma Natural Gas Gross Withdrawals

17 Baker-Hughes, Inc. Oklahoma Rig Count: Total Current= % increase in number of wells drilled from third quarter 1-13 in Oklahoma major shale plays; 8.8% increase from second to third quarter of

18 Quarterly U.S. and Oklahoma Nonfarm Employment Growth: (Seasonally-Adjusted Annualized Percent Change) U.S. Nonfarm Employment (millions) Oklahoma Nonfarm Employment (thousands)

19 Oklahoma Annual Nonfarm Employment Growth (%)

20 Percent unemployment Percent growth Oklahoma Unemployment Rate and Nonfarm Employment/Population Growth OK Unemployment Rate OK Population Growth OK Relative Nonfarm Employment Growth

21 Sector Change in Oklahoma Employment (Jobs): Other Services Information Food Manufacturing Transportation & Public Utilities Real Estate Other Nondurable Goods Manufacturing Natural Resources & Mining Plastics and Rubber Manufacturing Mgt of Companies & Enterprises Financial Activities Contract Construction Wholesale Trade Health Care & Social Assistance Electrical Equipment Manufacturing Transportation Equipment Manufacturing Educational Services Other Durable Goods Manufacturing Federal Government Fabricated Metals Manufacturing Nonelectrical Machinery Manufacturing Professional, Scientific, and Technical Retail Trade State and Local Government Accommodation, Food Services, Leisure Admin., Support, & Waste Mgt. Total Nonfarm: 19,688-1, 1,, 3, 4, 5, 6,

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

23 Oklahoma Annual Real Personal Income and GDP Growth (%) Real Personal Income (8-84$) Total Nonfarm Real GDP

24 3Q1 3Q 3Q3 3Q4 4Q1 4Q 4Q3 4Q4 5Q1 5Q 5Q3 5Q4 6Q1 6Q 6Q3 6Q4 7Q1 7Q 7Q3 7Q4 8Q1 8Q 8Q3 8Q4 9Q1 9Q 9Q3 9Q4 1Q1 1Q 1Q3 1Q4 11Q1 11Q 11Q3 11Q4 1Q1 1Q 1Q3 1Q4 13Q1 13Q 13Q3 Oklahoma City and Tulsa Quarterly Employment Growth (Deseasonalized, Annualized Percent Growth) Aug 1-13 Δemp (thous.): OK= 9. (.6%) OKC= 14. (.4%) Tulsa= 5.5 (1.3%) Rest of State= -1.7 (-1.8%) -1 OKC Tulsa OK

25 Oklahoma City Metropolitan Area Employment Growth , 1,5,,5 3, Professional & Business Services Accommodation, Food Services, Leisure Retail Trade Durable Goods Manufacturing Local Government Natural Resources & Mining State Government Federal Government Contract Construction Wholesale Trade Health Care & Social Assistance Financial Activities & Real Estate Transportation & Public Utilities Information Nondurable Goods Manufacturing Other Services Educational Services Total Nonfarm Jobs: 1,54 =. percent growth

26 Slowing world energy demand and increased supply further reduce oil prices, reduced political tensions with IRAN As U.S. economy nears full employment, lower in-migration and labor force growth; long-term aging of the population and slowing labor force growth Lower than average skills of labor force o o o o o o Risks and Longer Term Outlook Increasing mismatch between skill demands and skills of labor force Polarization of labor market: fastest occupational growth at the top and bottom ends of skill levels, slower growth in the middle 197: 4.6% of those with Bachelor s degrees (or higher) lived in top educated metropolitan areas 1: rose to 44% (Brookings Institution) Metro average in 1: 3%, OKC: 6.%, Tulsa: 4.5 %, and both had slower than average growth Oklahoma had the third largest per pupil cuts to education in the nation 8-13 (Center on Budget and Policy Priorities) Oklahoma teacher pay among the lowest in the nation, even after adjusting for price and quality of life differences across states

27 Thank you for your attention