Oklahoma City Economic Reports

[Bellaboo]

This is depressing being that OKC really needs the growth to continue another few years. Steve posted an article not long ago outlining possible scenarios. So far, at least nobody is predicting a 1987 style bust. That was the one that nearly killed OKC.

This actually was what made OKC take notice and change. It resulted in not landing United, which in turn MAPS was born. We all know the rest of the story.
Probably the best thing that's ever happened to OKC.

[Plutonic Panda]

At Oklahoma City Council budget workshop, economist says he expects 'slow growth' | News OK

[Plutonic Panda]

Oklahoma City sales tax climbs, but forecast is dimmer | News OK

[bombermwc]

People love to cry wolf here every time anything touches gas prices.

"Gas prices are up, the economy is going to tank and we'll have a billion dollar shortfall!!!!!"
"Gas prices are down, the economy is going to tank and we'll have a billion dollar shortfall!!!!!"

Hmmm, well one of those can't be right.......

[Plutonic Panda]

Sliding oil prices will hit new Oklahoma City apartment market first if any, brokers say | News OK

[Plutonic Panda]

Then there's this article

Oklahoma City apartment market is sailing higher seas than ever | News OK

[Plutonic Panda]

Oklahoma City posts sales tax gain | News OK

[Plutonic Panda]

Oklahoma City to implement hiring freeze in November | News OK

[Superhyper]

The dip in sales tax revenue is definitely not good news, as that means local businesses are pulling in less revenue as well. Considering the duration and severity in the drop of oil/gas prices, we've actually held up pretty well so far though.

[Teo9969]

Yeah…Oil really needs to rally soon…I think we really only have about 7 months left where we can sustain the current pace of our economy @ current prices, and those last 8 months are going to be thinner than the previous 10.

The projected warm winter is also going to hurt local companies since most of our locals are pretty exposed to Natural Gas.

[bchris02]

Yeah it's down in the low 40s again. Every time it tries to break above $50 the price collapses again. It seems this time of year usually sees the lowest oil prices so maybe it will rally this winter going into the spring.

[Plutonic Panda]

Yeah…Oil really needs to rally soon…I think we really only have about 7 months left where we can sustain the current pace of our economy @ current prices, and those last 8 months are going to be thinner than the previous 10.

The projected warm winter is also going to hurt local companies since most of our locals are pretty exposed to Natural Gas.

I could be wrong, but I was under the impression the El Nino affected us in the way we get colder than average temperatures and above average precip.

[baralheia]

From https://www.climate.gov/news-feature...winter-outlook:



Oklahoma will range from average to below-average temperatures this winter, and wetter than normal too.

[gopokes88]

I could be wrong, but I was under the impression the El Nino affected us in the way we get colder than average temperatures and above average precip.

But it makes the NE warmer then normal

[Plutonic Panda]

Yeah I didn't know how it affected what exactly. My understanding is the west will also be above average temps but at least they are getting rain.

[Plutonic Panda]

Oklahoma City unemployment rate declines | News OK

[gopokes88]

OKC's economy is more diverse then people realize. An oil slump isn't going to crush us. However, it's not quite diverse enough to boom during an oil price slump. That being said very cities could boom with an industry slumping. Dallas, LA, Seattle, Chicago, Atlanta, Boston are probably the only ones could withstand something like this (probably others, but those are just off the top of my head)
Cities like New York slump in a bear market, San Francisco gets hurt in a tech bubble, Houston hurts with oil slumps, Detroit with cars, Nola when tourism stops, etc etc.

[bchris02]

OKC's economy is more diverse then people realize. An oil slump isn't going to crush us. However, it's not quite diverse enough to boom during an oil price slump. That being said very cities could boom with an industry slumping. Dallas, LA, Seattle, Chicago, Atlanta, Boston are probably the only ones could withstand something like this (probably others, but those are just off the top of my head)
Cities like New York slump in a bear market, San Francisco gets hurt in a tech bubble, Houston hurts with oil slumps, Detroit with cars, Nola when tourism stops, etc etc.

I agree with this.

I have been told that the 1980s was as severe as it was because of Penn Square Bank and the financial crisis surrounding that. Oil was only a part of the equation.

[ctchandler]

I agree with this.

I have been told that the 1980s was as severe as it was because of Penn Square Bank and the financial crisis surrounding that. Oil was only a part of the equation.

Bchris,
I stand to be corrected, but the financial crisis caused by Penn Square Bank, (and all of the idiot banks around the country) was based on oil and the crazy loaning (then selling the paper/loans to the idiot banks) of funds for oil leases. I believe that oil was 100% of the equation. You should read the Penn Square Bank book about what happened, it will open your eyes a lot. I need to look for my copy of the book, it's around here somewhere.
C. T.

[Teo9969]

Yes, from what I remember reading, the banks collapsed because they were WAY over leveraged in oil and gas.

No doubt the local banks have much better balance sheets these days, but they are surely still heavily involved with energy in this state, and energy lagging for much longer will hurt them as well. But no, OKC's economy is not going to collapse. Even so, it's been growing at an impressive rate, and that growth is indeed threatened by all this.

[ou48A]

Almost all new exploration and production only exist due to borrowed money and when that is gone so will most new exploration and production activity’s…. As a result further large scale employment reductions in the industry are very, very likely.

The lending institutions were way over leveraged in the 1980’s… but to prevent the same scenario the lending institutions either have, or will put a halt to most new further exploration and production lending…. Which means further new pain for the local economy….
The lending institution will also make staff reductions along with many others.

History | OERB
“According to a 2014 study, the oil and natural gas industry in Oklahoma produced approximately $65 billion in gross state product. That’s one of every three dollars. The industry also supports 465,616 full and part-time jobs – one of every five jobs in the state.”

If I recall correctly, in 1981 the figure was one out of 4 dollars of gross state product originates its self from the oil and natural gas industry. If what I remember is correct, in spite of large growth of other industry and business, by percentage the state is actually more exposed to the oil and natural gas industry than before the 1980’s bust.

[Teo9969]

Almost all new exploration and production only exist due to borrowed money and when that is gone so will most new exploration and production activity’s…. As a result further large scale employment reductions in the industry are very, very likely.

The lending institutions were way over leveraged in the 1980’s… but to prevent the same scenario the lending institutions either have, or will put a halt to most new further exploration and production lending…. Which means further new pain for the local economy….
The lending institution will also make staff reductions along with many others.

History | OERB
“According to a 2014 study, the oil and natural gas industry in Oklahoma produced approximately $65 billion in gross state product. That’s one of every three dollars. The industry also supports 465,616 full and part-time jobs – one of every five jobs in the state.”

If I recall correctly, in 1981 the figure was one out of 4 dollars of gross state product originates its self from the oil and natural gas industry. If what I remember is correct, in spite of large growth of other industry and business, by percentage the state is actually more exposed to the oil and natural gas industry than before the 1980’s bust.

No doubt that's a big impact, but 1. OK =/= OKC. 2. Not every single job lost is going to be a 100% retreat in production and pay. Some of these people will open up new businesses in new fields, go to work in other local markets, etc. etc.

As long as oil is down it ultimately hurts OKC because oil is OKC's largest export. But thankfully several of our local banks are actively involved in other markets as well. Midfirst is in Denver and Phoenix, AF (via First Fidelity) is also in Arizona. BOK being active in 8 different states should also help a bit.

Tinker has also done very well and really managed well amongst major Federal concerns, and the whole Aviation industry is growing well in the state.

OKC needs to continue to boost its tourism, and hope that the Thunder start winning some championships (The economic impact of 2 days of NBA Finals is close to $100M isn't it? Not a ton of money, but it gets more people aware of the city overall).

It would be nice to see over the next 5 to 10 years what Oklahoma is going to do to address the evolving nature of energy. 20 years from now, It's reasonable to believe that as a country will be less dependent on fossil fuels, and if OK doesn't plan with how to deal with that, we'll have little to no export economy. At least Texas has Austin.

[gopokes88]

Bchris,
I stand to be corrected, but the financial crisis caused by Penn Square Bank, (and all of the idiot banks around the country) was based on oil and the crazy loaning (then selling the paper/loans to the idiot banks) of funds for oil leases. I believe that oil was 100% of the equation. You should read the Penn Square Bank book about what happened, it will open your eyes a lot. I need to look for my copy of the book, it's around here somewhere.
C. T.

The bank crashing made the oil recession even worse. Just a regular oil crash hurts, an oil crash that takes the banks with it makes it brutal.

Bank recessions historically, in any economy, are often the most devastating and difficult to come back from.

[gopokes88]

No doubt that's a big impact, but 1. OK =/= OKC. 2. Not every single job lost is going to be a 100% retreat in production and pay. Some of these people will open up new businesses in new fields, go to work in other local markets, etc. etc.

As long as oil is down it ultimately hurts OKC because oil is OKC's largest export. But thankfully several of our local banks are actively involved in other markets as well. Midfirst is in Denver and Phoenix, AF (via First Fidelity) is also in Arizona. BOK being active in 8 different states should also help a bit.

Tinker has also done very well and really managed well amongst major Federal concerns, and the whole Aviation industry is growing well in the state.

OKC needs to continue to boost its tourism, and hope that the Thunder start winning some championships (The economic impact of 2 days of NBA Finals is close to $100M isn't it? Not a ton of money, but it gets more people aware of the city overall).

It would be nice to see over the next 5 to 10 years what Oklahoma is going to do to address the evolving nature of energy. 20 years from now, It's reasonable to believe that as a country will be less dependent on fossil fuels, and if OK doesn't plan with how to deal with that, we'll have little to no export economy. At least Texas has Austin.

Actually crude demand will continue to grow, the emerging economies will use a lot of oil going forward. The US could be a net exporter of crude very soon in the future. That will be very good for the economy.

[Plutonic Panda]

At least Texas has Austin.

I believe there is some strong alternative energy investment going on in San Antonio as well.