Oklahoma City Economy Still In Limbo, Economist Tells City Council
Oklahoma City University economist Russell Evans told city council members during Tuesday's meeting there's still a lot of economic uncertainty.
Evans typically speaks to the city council in February when it’s time to plan the annual budget. But he was asked to give a special presentation after some council members pointed out that the city was suffering more than usual for its ties to the oil and gas industry, The Journal Record’s Brian Brus reports:
Evans confirmed that the industry is still in a contraction phase as evidenced by the Oklahoma Energy Index of business activity sliding for the 17th consecutive month in April and still resting at 43.5 percent below its peak two years ago. However, the pace of contraction is easing, he said, providing a kernel of hope that the state will soon move up to full health. On the other hand, analysts at JPMorgan Chase and UBS financial services company recently put the chances of a U.S. recession in the next 12 months at more than 33 percent. Those mixed messages make it difficult to provide guidance for Oklahoma City, Evans said.
“We always sort-of use as an analogy, it’s that interim when you’re at the height, the very worst of your flu, and before you’re back to 100 percent,” Evans said. “There’s that period of recovery where you don’t feel quite right, but you’re certainly on the mend. That’s where we are right now in the energy industry.”
Evans also said both Tulsa and rural Oklahoma’s manufacturing base have been affected by the energy downturn, but geography and inactivity insulated Oklahoma City.
The state government’s fiscal situation deteriorated sharply when it was revealed that revenue collections hit a six-year low, while Oklahoma City sales and use tax revenue contracted at a much more modest rate. The metro has produced jobs over the last year while the state overall has reported job losses. Nationwide, only 31 metros have more than 2 million people and only five of them are growing faster than Oklahoma City. Given current population growth rates, the Oklahoma City Metropolitan Statistical Area will join that group in about 25 years. Evans said many analysts and policymakers think that milestone will help expedite growth for the region.
Watch Tuesday's Oklahoma City Council Meeting. Evans' Presentation Begins At 45:20
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