Oklahoma's economy to grow, execs say
SURVEY REVEALS POSITIVE SHORT-TERM LOCAL BUSINESS OUTLOOK, BUT UNEMPLOYMENT RATES ARE EXPECTED TO RISEPublished: Tuesday, August 4, 2009 7:00 am By: Debbie Blossom
Oklahoma was one of nine Midwest and Plains states where managers and executives are anticipating short-term economic growth, a business survey released Monday showed.
A Mid-America Business Conditions index economic outlook from Creighton University Forecasting Group said its monthly survey of supply managers and business executives suggests the region's economy is expanding for the first time in almost a year.The region also includes Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.
Oklahoma's overall index remained above growth neutral for the second straight month, said Creighton economist Ernie Goss, who oversees the report.
The state index dropped slightly to 52.3 from June's regional high of 53.6, Goss said. The survey index ranges between 0 and 100; any score below 50 suggests a contracting economy over the next three to six months, and a score above 50 indicates an expanding economy.
New orders, production and delivery lead time indexes all expanded, the survey said. But inventories and employment were just under neutral.
Goss predicts Oklahoma's unemployment rate, which hit 6.3 percent in June, will reach 6.5 percent in the fourth quarter - its highest level since 1992. "The state will continue to shed durable-goods manufacturing jobs, albeit at a slower pace," Goss said. "On the other hand, employment has stabilized in nondurable manufacturing and nonmanufacturing sectors."
But if the nation's, and Oklahoma's, past history with recessions is any clue to this latest downturn, it could take years for employment to get back to pre-recessionary levels, one state economist said.
"I think we've probably seen the bulk of job decline ... but my best guess is it might go higher," said Bob Dauffenbach, associate dean of research at the University of Oklahoma's Michael F. Price College of Business.
Dauffenbach cited earlier national recessions in 1990-91 and 2001, where it took 30 months and 46 months, respectively, for employment to recover. And Oklahoma matched that nationwide pattern, he said. Yet Oklahoma is well positioned, he said. "I'm fairly impressed we are not seeing any big negatives, and I'm really hopeful we're not going to have much of a slide from the current pace."