Oklahoma Economic Outlook 2015

Transcription

1 Oklahoma Economic Outlook 2015 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 Forecast (November, 2014) Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q

3 U.S. Potential GDP Growth (%): Population and Labor Force Growth Constraints (IHS Global Insight, Inc.) Nonfarm Emp Population Civilian Labor Force Potential GDP-Smoothed

4 September Nonfarm Employment Growth Rates (%) -1.0 to to to to 5.0 US OK

5 Employment Growth Patterns (September 13-14) Energy states had about 0.5 percent faster growth (AK, CO, LA, MT, ND, OK, TX, WV, WY) 0.4 percent per change in 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 0.7 percentage point lower growth relative to Colorado Manufacturing states 0.2 percent lower growth (IL, IN, MI, OH, PA, WI) Farm states 0.2 percent faster growth (IA, MT, NE, ND, SD)

6 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 M03 Natural Gas Oil Oklahoma Energy Production (natural logarithms) N a t u r a l G a s O i l

7 $/bbl $/mmbtu Energy Prices (IHS Global Insight, Inc.): West Texas Intermediate Oil (WTI) and Henry Hub Natural Gas (PNGHH) Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 WTI PNGHH 3.0

8 U.S. and Oklahoma Mining Employment Growth (Annualized Rates) 15% 10% 5% 0% -5% -10% U.S. Mining OK Mining

9 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 (%) US Nonfarm Emp OK Nonfarm Emp

10 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

11 Sector Change in Oklahoma Employment (Jobs): , ,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

12 Oklahoma Population Growth Rates (%) P o p u l a t i o n E m p l o y m e n t 0-2 Actual Growth Rate Predicted Growth Rate Relative Oklahoma Nonfarm Emp Growth

13 Components of Cumulative Population Growth: (does not reflect 2010 Census) and : %population growth per year 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

14 Professional, Scientific, and Technical Services (% BEA Total Employment) OK US

15 Oklahoma Occupation U.S. Location Salary($) Quotient Petroleum Engineers 149, Computer and Information Systems Managers 132, Physicists 117, Computer and Information Research Scientists 109, Geoscientists, Except Hydrologists and Geographers 108, Actuaries 107, Computer Hardware Engineers 106, Aerospace Engineers 105, Software Developers, Systems Software 104, Sales Engineers 101, Economists 101, Mining and Geological Engineers, Including Mining Safety Engineers 96, Software Developers, Applications 96, Engineers, All Other 94, Biomedical Engineers 93, Electronics Engineers, Except Computer 93, Medical Scientists, Except Epidemiologists 90, Materials Engineers 89, Mechanical Engineers 85, Civil Engineers 85, Environmental Engineers 85, Industrial Engineers 83, Computer and Mathematical Occupations 82, Electrical Engineers 78, Chemists 77, Geological and Petroleum Technicians 58,

16 Oklahoma Major Metro Total Nonfarm Employment Growth Rates (%) Tulsa OKC OK ROS

17 Forecast Risks Oil prices fall further: slowing economic growth worldwide, 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 ) Labor force does not bounce back (poor wage growth; slower immigration) Weakness in the housing market (slow household formation: limited access to mortgage debt, student loan debt)

18 3 Alternative Scenarios: Oklahoma Nonfarm Employment (15% probability each) IHS Pess Lower Oil Prices Base

19 Thank you for your attention