2020 OKC economic forecast: continuing growth expected; softening possible
According to the Chamber’s 2020 Economic Forecast, the Oklahoma City metro economy experienced a healthy year in 2019. Strong economic conditions at the national level helped to bring about a third consecutive year of positive job growth in the metro. Overall nonfarm annual job growth was 1.2 percent, or 7,900 jobs, in the Oklahoma City MSA.
The largest percentage year-over-year job gains were found in the construction (+8.3 percent), wholesale trade (+4.9 percent), scientific & technical services (+4.8 percent), and health services (+3.0 percent) sectors. Positive Oklahoma City metro job growth in 2020 is expected, but may soften to 0.5 percent, or approximately 2,900 jobs. While the Oklahoma City metro economy is less dependent on the national economy and energy industry than the rest of the state, it is not wholly immune to the influence of either. A slowdown in activity could make the local economy vulnerable to national uncertainties that may arise, and to a sluggish energy sector.
Value of construction projects
According to Dodge MarketLook, in 2019 the total construction value of tracked contract projects (residential, non-residential, and non-building infrastructure) in the Oklahoma City MSA was $3.6 billion. That was 8 percent less than the prior year. The largest positive year over year gains were found in the hotel & motel, schools & colleges, hospital, and amusement categories. The largest year-over-year construction value declines were in office & bank, libraries & museums, public buildings, and miscellaneous non-residential categories. For 2020, total construction value of contract projects is forecasted to increase by 2 percent with positive gains in both nonresidential and residential. Decline is expected in non-building (bridges, water supply systems and other).
Unemployment rates remain low
The Oklahoma City metro ended 2019 with an annual average unemployment rate for the year just above three percent (approximately 3.1 percent), with monthly unemployment rates ranging as low as 2.6 percent and as high 3.5 percent. Oklahoma City ranked among the lowest 25 unemployment rates for large metros (over 1 million population), and in April 2019 matched the lowest monthly unemployment rate the Oklahoma City metro had experienced in the past 20 years (2.6 percent). But, the state and Oklahoma City metro started to see a slight uptick in the number of company layoff announcements towards the end of the year.
Short- and long-term population growth continues to be important
Area population growth helps to offset low unemployment and increase total labor force. When official 2019 U.S. Census population figures are released, it will show that the Oklahoma City metro population has grown to be just over 1.4 million.
For the past 15 years, population growth has been an impressive story for Oklahoma City. Since 2005, the Oklahoma City metro has grown by nearly a quarter million people. The average annual population growth rate from 2005 to 2019 was about 1.5 percent, double that of the nation. However, over the past three years there has been a slowing in year-over-year growth.
While the long term growth trends continue to be a positive, it reinforces the importance of economic development efforts to recruit new businesses and help existing companies grow. Population gains follow job growth.
As recognized over the past several years, national urbanization trends continue to benefit the two largest metros in the state. This is specifically seen in looking at how much of the state’s economy and growth can be attributed to the Oklahoma City and Tulsa metros. Combined, the Oklahoma City and Tulsa MSAs now account for 68 percent of the state’s GDP, 67 percent of personal income and 61 percent of total population (or $7 out of every $10 of goods and services, $2 out of every $3 of personal income and three out of every five people).
Job growth from Chamber-assisted companies
2019 brought about the end of the fourth year of the Chamber’s five-year economic development program called Forward Oklahoma City V. The Forward campaign has provided longer term strategic planning to the region’s economic development initiatives for nearly 25 years.
Since 2016, 20,048 jobs with payroll in excess of $1 billion, and $1.9 billion in capital investment has been announced by Chamber-assisted companies. As part of that program, overall metrics are tracked for Chamber-assisted companies in a number of different areas: new start-up companies assisted, job growth from existing companies as well as new to market firms, wages, capital investment, and growth in tax base.
In 2019, Chamber-assisted companies announced plans for the creation of 4,658 jobs with an annual average salary of $69,561. In addition, those same companies announced more than $963 million in capital investment. The Greater Oklahoma City Chamber ended 2019 with 95 active projects in its economic development pipeline. The pipeline tracks companies or projects that are potentially looking to relocate or expand in the Greater Oklahoma City region. The largest number of projects by facility type included manufacturing, office, distribution, aviation, and shared-services/call center.
The full 2020 Economic Forecast is on OKCChamber.com/forecast.