So far, Oklahoma City remains afloat despite national economic crisisPublished: Friday, February 6, 2009 7:00 am By: Steve Lackmeyer and Don Mecoy
After spending the past several months working real estate deals in Florida, local broker Gary Gregory sees an economic map that has almost the entire country under water with just a few visible islands of relative prosperity.
Oklahoma City, he says, is one of those islands, and the latest economic reports appear to back that assertion, though waves are clearly crashing against the shore.
The city's sales tax collections for January, reflecting December sales, were up 1.6 percent over the same period the year before. The year-to-date collections, meanwhile, are up by 5.72 percent. And while the growth rate for the year has slowed, city budget director Craig Freeman said Oklahoma City is going against the national trend.
January decline seen
"The sales taxes look very good right now," Freeman said. "But January was the first month we had lower levels. We keep expecting that at some point, to come we're going to be affected by the national economy."
Freeman said the latest reports, while showing some benefit from a state tax amnesty program that ended in the fall, still show surprising growth in areas ranging from home furnishings to eating and drinking establishments.
Freeman said local sales tax growth is expected to continue at a rate of 5 percent through the June 30 end of the fiscal year.
Not all of the numbers look so good.
Engineering permit fees, a key indicator on housing and commercial construction, are down 32 percent. And while home furnishings were up 10.2 percent and eating and drinking establishments were up 3 percent over a year ago, general merchandise sales were down 4.9 percent.
Watching oil and gas
Freeman also is keeping his eyes on oil and gas prices.
Based on forecasts provided by economist Mark Snead, Freeman estimates the local economy shouldn't be hurt as badly as the national economy as long as oil prices stay above $40 a barrel.
"When oil drops below $40 for a long time, that will have a negative effect on us long term," Freeman said.