Tulsa’s employment services sector is growing more than twice as fast as Oklahoma City’s and the rest of the state, which means Tulsa is seeing economic growth and catching the rest of the state, said a portfolio manager with a Tulsa-based asset management company.
“Traditionally, increased growth in the employment services sector has been a leading indicator of a growing economy,” said Jay M. Matlock, portfolio manager with Longbow Asset Management Co., 415 S. Boston Ave. “These services allow employers to temporarily fill much needed positions faster than if the company was to go through the standard hiring processes, allowing business to increase production at the first sign of increased demand for its goods and services.”
With double digit growth in commercial, industrial, office and residential permits over the last year, it is easy to see why Tulsa’s construction and specialty trade sectors have boomed, he said.
“This is apparent when driving downtown and seeing the beginnings of the downtown arena or shopping at Utica Square and noticing the behemoth office complex under construction just south of the 21st Street and Utica Avenue intersection,” Matlock said.
A new five-year $108 million dollar capital improvement project initiated by the Tulsa International Airport will continue to boost growth in this area, too, Matlock said.
“However, as interest continues to rise and the cost of borrowing becomes more expensive, these areas will be the most affected by a potential cooling economy,” he said.
Overall, cyclical forces continued to boost Oklahoma’s economy, said Lynn Gray, chief economist at the Oklahoma Employment Security Commission.
“The state’s non-seasonal adjusted unemployment rate fell over the month, as employment grew by nearly the same number that unemployment dropped,” he said.
At 4.1 percent, June’s seasonally adjusted unemployment rate is at its lowest point since May 2001.
The consumer has been the driving force behind the need for department stores to continue their hiring efforts and employee accumulation, Matlock said.
“High gas prices are not keeping the shop-till-you-drop-oholics from making their daily and weekly pilgrimage to Woodland Hills, Promenade Mall or other stand-alone department stores,” he said. “This sector understands the value of a strong sales team to keep the cash registers ringing.”
Telecommunications has been in a dismal state of depression since the technology bust in 2000.
However, this sector is entering a new era of technological advances and regulation.
“Twenty years ago, the government was trying to heavily regulate and tear down the large businesses,” Matlock said. “Now, it is just the opposite.”
Companies have made national headlines through major acquisitions recently include SBC Communications when it bought AT&T, changed its name to AT&T and then agreed to acquire BellSouth. Also, Sprint merged with Nextel while Verizon Communications purchased MCI and France’s Alcatel agreed to buy Lucent Technologies.
Meanwhile eBay acquired Internet phone service Skype and Level 3 purchased Williams Communications.
“This is no longer the telecommunications arena we once knew,” Matlock said. “It has the potential to be one of Tulsa’s fastest growing industries again once it determines what direction it is heading.” ?
June marks the fourth straight month of declining annual employment growth for the state, according to the Oklahoma Employment Security Commission.
The Tulsa metropolitan statistical area continues to fare better than the rest of the state, however.
In June, the Tulsa MSA reported an annual growth rate of 2.6 percent. For the same period, the Oklahoma City MSA posted a rate of 2.1 percent, and the state as a whole reported growth of 1.8 percent.
June’s statewide annual employment growth rate of 1.8 percent dropped by 0.1 percent over the month and by 1.2 percent since February 2006, said Lynn Gray, OESC chief economist.
The slowdown in annual growth is concentrated in the Service Providing Industries. In particular, areas such as restaurants and general merchandise stores report sluggish year-to-year growth and even over-the-year losses, Gray said.
The smaller Goods Producing Industries segment continues to expand at a strong pace, growing by 4.4 percent compared to June 2005.
“The picture painted by this employment report reinforces other information that suggests the economy, while still expanding at a moderate pace, has undoubtedly slowed over the past few months. This waning economic growth rate could reduce some of the inflation building in the economy and may allow the Fed to pause in its current path of increasing interest rates,” Gray said.