 |
Speeches homeOklahoma Economic Forums
|
| The Oklahoma economy is in the midst
of an economic expansion that began in 1988. Since then, the state's economy has been
stable and growing at a moderate pace. Job growth has been in excess of 2 percent in each
year except 1991 and 1992. But during those two years, modest job gains in Oklahoma
compared favorably to the job losses incurred by the nation during its recession. During
its recent expansion, the Oklahoma economy has become more diversified with growing
services and manufacturing sectors offsetting the shrinking mining sector. The Oklahoma
economy may slow somewhat in the second half of 1996 and in 1997, but is likely to
maintain moderate growth in the period ahead.
The state's energy industry has been generally stable over the past several years. Recently high oil prices have boosted exploration a little, but the long-term prospects call for further declines in oil production. Meanwhile, natural gas prices have been soft, providing little stimulus to drilling activity or gas production. Thus, the energy industry will likely maintain its steady-as-she-goes performance. Longer-term, environmental concerns may lead to increased output from the state's considerable natural gas reserves.
Drought conditions and mounting losses in the cattle industry have battered the Oklahoma farm economy this year. As a result, farm income in the state is expected to decline in 1996, following two years of slumping farm income. The outlook is improving, however, as cattle prices move higher and weather conditions return to normal. Already, cattle feeders have regained narrow profit margins, but profits will return only slowly for cattle ranchers.
Service-producing industries have been leading the state's expansion. Strong growth in business and health care services have pushed service job growth in Oklahoma ahead of service job growth in the nation. Other service-producing industries such as retail trade have also been growing at a solid pace. The recent period of rapid growth in service-producing industries is probably coming to a close, but the state's business climate remains attractive to telemarketing and other business service firms. And while expansion in retail trade likely will slow in the months ahead, employment and income growth in the state will remain strong enough to support moderate growth.
The manufacturing sector in Oklahoma has been more volatile than other sectors over the course of the expansion. While most other sectors avoided job losses during the national recession in the early 1990's, the state's manufacturers suffered a sharp decline in employment in 1992. Then, however, manufacturing employment rebounded with food processing industries leading the way. More recently, production of durable goods has taken over as the leader of the states manufacturing sector, but overall manufacturing job growth has slowed. Expansion in the state's factories will likely continue in coming months, but little acceleration in the pace of expansion is expected.
After several years of declining employment in the late 1980s, the construction sector in Oklahoma has made a strong comeback in the 1990s. Robust homebuilding, commercial construction, and public infrastructure building have sustained healthy gains in construction employment for the past four years. The pipeline of homes and other building projects has diminished somewhat, suggesting a slower and more sustainable pace of construction activity in the coming months.
|
