Economic Growth Strong in State

Oklahoma has enjoyed strong wage, job and income growth since the most recent national recession ended in mid-2003, said two Oklahoma State University economists.
The latest research from Mark Snead and Suzette Barta reveals that Oklahoma continues to build on three years of a broad-based economic expansion, fueled in part by a revived energy sector. The expansion has outperformed the nation in both job creation and income growth in the 2003 to 2006 period.
Growth in wage and salary income has been equally impressive, Snead and Barta said.
The 10.2 percent gain in 2006 represents the fastest annual growth in state wage and salary income since the end of the oil boom in 1982.

Tale of Turnpike Cities
Between the Tulsa and Oklahoma City MSAs, Tulsa’s employment grew slightly faster at 7.2 percent compared to 6.5 percent in the Oklahoma City MSA, according to the report.
Tulsa grew slightly above the state average while the Oklahoma City area grew slightly below.
Rogers County was the fastest growing Tulsa MSA county while Tulsa County added more than 80 percent of the jobs. Lincoln County was the fastest growing OKC MSA county while Oklahoma County added roughly two-thirds of the jobs.
The metro area performance largely reflects the results for the core county in each of the two major MSAs.
However, uneven employment growth rates existed among the counties of the state’s metropolitan areas.
Within the Tulsa MSA, Rogers County grew the fastest at 19.7 percent. But, Tulsa County added the most actual jobs at 22,318.
Creek County and Pawnee County struggled with slight job losses.
Within the Oklahoma City MSA, Lincoln and McClain Counties both posted high growth rates of 21.7 percent and 19.5 percent, respectively. Also, Oklahoma County added the most jobs at 20,996.
While none of the counties in the OKC MSA experienced job losses, the two slowest growing counties, Grady and Logan Counties — at 2.1 percent and 3.1 percent, respectively — posted less than half the state average job gain.
The mining sector was the fastest growing sector in the state — up 45.7 percent and 13,129 jobs over the period, Barta said.
The influence of oil and gas is visible in many smaller counties such as Woodward County. Job growth was also strongest in the core oil and gas producing counties, or those producing 5 to 15 million barrels of oil equivalent.
“It is interesting that the largest oil and gas producing counties were not necessarily the counties with the strongest employment growth,” Barta said. “Furthermore, counties with no oil or gas production averaged well above state average job gains in the period.”
Job growth was especially slow among the very largest oil and gas producing counties, except Beckham County, which is in the top three for oil and gas and boasts a growth rate of 19.4 percent. The counties with no oil or gas production averaged well above state average job gains in the period.
Smaller counties across the state outperformed the metropolitan areas. The state’s micropolitan areas dominated the growth in the smaller counties.
“Micropolitan counties stand out with strong growth — particularly Woodward County, Beckham County and Bryan County,” Barta said.
The “Micropolitan” designation is new since 2003. These counties have a city with a population base between 10,000-50,000.
“I am not surprised at their growth, because it is a national phenomenon,” Barta said. “Micropolitans that are adjacent to metro areas in particular do quite well. Overall, it is interesting that the smallest half of the state outperformed the largest half.
However, the 10 smallest counties expanded at less than half the rate of the state. Nine of the 10 are in the western half of the state.
Economic growth is rarely distributed evenly statewide, and state totals often mask any disparities in economic performance across the various regions of the state, Snead and Barta said.
“Differences in industry mix can generate vastly different results in terms of job and income growth at the local level, and often the state’s overall performance relative to the nation is determined by a relatively small number of industries or geographic areas within the state,” they said in the report.
The fastest growing county in the state was Love County, and most of the growth is attributed to “local government,” Barta said.
“We know that Native American employment is classified as ‘local government’ by the Bureau of Economic Analysis, so some of this growth could be due to hiring by area tribes,” she said. “I believe the Chickasaw Nation has some enterprises in the county. We are not, however, able to pin that down specifically.”
The southeast quadrant of the state was the fastest growing region, expanding at nearly double the rate of the northwest quadrant.

State Industry Employment Trends
In addition to mining, four other industries generated two of every three new jobs in the state between 2003 and 2006.
In terms of actual jobs, the top five fastest growing sectors in the period:
Local government — 20,134 jobs
Administrative and waste services — 13,987 jobs
Health care and social assistance — 10,148 jobs
Accommodation and food services — 8,360 jobs.

Outpacing National Trends
The number of wage and salary jobs in Oklahoma increased at a 2.2 percent average annual pace statewide from 2003 to 2006.
A total of 96,076 new jobs were added, exceeding the 1.6 percent pace at the national level by more than half a percentage point annually.
The state matched the nation at 1.2 percent job growth in 2004 as the recovery started slowly in the state but then accelerated to gains of 2.7 percent and 2.8 percent in 2005 and 2006, respectively, according to the research.
Oklahoma outperformed the nation by roughly a full percentage point each year.

Wage, Salary Growth
Wages and salaries increased an average 6.9 percent annually since 2003 and outperformed the nation’s growth rate of 5.6 percent during the period. The state slightly trailed the nation in income growth in 2004 — 4.7 percent versus 5.4 percent — before outperforming the nation in both 2005 — 6 percent versus 5.2 percent — and 2006 — 0.2 percent versus 6.3 percent.

The results for the current expansion through 2006 compare favorably to state performance in the previous expansion period spanning 1988 to 2001 when annual wage and salary job and income growth averaged 2.2 percent and 4.9 percent, respectively. The state has matched the strong job gains in the prior expansion and exceeded the income gain by 2 percentage points annually.
Snead and Barta are research economists at the Center for Applied Economic Research in the OSU Spears School of Business. ?

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