Job growth, income rise and young talent fuel Oklahoma City's economic momentum in 2024

The momentum of a rebounding economy and the effects of pandemic-era supplemental income streams set the stage for 2024, according to an economic outlook report released by the Greater Oklahoma City Chamber.

The annual study was completed by Russell Evans, partner and chief economist for Thorberg Collective, and Eric Long, research economist for the Chamber.

The forecast suggests that job growth in Oklahoma City will slow from its 2.4% pace of 2023 to 2% in the coming year. The study also noted the rise in self-employment in the area, as the economy becomes more entrepreneurial.

Increases are also contemplated in the forecast for population and income. Population growth is predicted to remain strong, with 1.2% growth this year. Per capita income is expected to grow by 4.7% this year to more than $66,000.

Job growth is also expected this year, with an increase of nearly 14,000 jobs, being led by growth in health services and the trade sector. These two sectors will represent more than half of the expected gain in private payrolls. A predicted weakening of consumer spending will lead to flat employment in leisure and hospitality. Overall job growth in Oklahoma City has outpaced national growth since 2010. Nonfarm earnings have also been stronger than the U.S. average, with earnings averaging 4.6% a year, compared to 3.9% nationwide.

The forecast also recognized a decrease in job postings in the area – data that can be viewed as a proxy for future hiring intentions. The total number of job postings in December 2023 for the Oklahoma City metro was down by 19% compared to December 2022. Nationally, that number was down 31%, showing the relative strength of the Oklahoma City metro.

Two alternative forecast models show a more modest growth expectation of between 0.3% and 0.7%, reflecting the local economy’s vulnerability to national and global uncertainties.

A high concentration of young people in the metro should provide labor pool support for years to come. Quality of life improvement and job opportunities are critical to keeping this talent in the market.

A Look Back at 2023

Oklahoma City’s metro economy experienced year-over-year nonfarm job growth of 2.4% or a gain of 17,000 jobs. The largest percentage of growth was in education and health (6%), leisure and hospitality (4.8%), construction (3.2%), manufacturing (2.7%), government (2%), and mining/oil and gas (2%). Unemployment for the year was 2.9%, the fourth lowest rate since 1990. This rate is among the 20 lowest for metros of a million population or more. The total labor force, driven by population gains, was the largest in history at 752,000.

Real Estate Outlook

The market rents in the industrial market grow in 2023 by 4.1%. The industrial market vacancy rate ended the year at 5% and is expected to rise modestly in 2024. Another 4.1 million square feet of industrial construction is underway, with 88% pre-leased.

The office market experienced rent growth of 1.6% in 2023, with a vacancy rate of 10% at year-end, outperforming the national rate of just under 14%. There are nearly 700,000 square feet of office product under construction. Rates average $19.54 per square foot across all property types.

Taxable retail sales in the Oklahoma City metropolitan area increased 2.7% in 2023 over 2022. This increase came on the heels of double-digit increases in 2021 (+13.6%) and 2022 (+11.6%) – the largest increases in at least 30 years. At approximately $29.4 billion, the Oklahoma City metro accounts for 44% of the taxable retail sales for the state. Retail vacancies in the Oklahoma City market were up slightly to 8.9%, compared to 8.5% a year ago. Total retail square footage has grown to more than 50 million square feet.

Higher interest rates led to a slowdown in housing starts for the Oklahoma City metro, with 4,465 housing starts in 2022, the lowest since 2016, and notably lower than a pre-pandemic total of 5,366 in 2019. Like the nation, Oklahoma City area home sales and home price growth slowed in 2023. More than 22,800 closed sales were reported. Median home prices in 2023 rose 3.3% to $249,000. Single-family home prices rose 2.0%, while townhouse-condo prices were up 5.2%.

The value of construction projects underway in the metro also saw a decline from 2022, with an 18% drop. The total construction value of tracked contract projects was $4.4 billion. The largest gains were found in warehouses, manufacturing, miscellaneous nonresidential buildings and dormitories. The largest declines were in hotels and motels, retail stores and restaurants, parking garages and amusement. Dodge, a construction data firm, forecasts an increase in 2024 of 12% with flat values in non-residential and a 10% increase in residential construction. They also expect a 37% increase in non-building infrastructure projects, such as bridges, water supply systems and others.

Statewide Outlook

The forecast also provided an outlook for the state. Oklahoma regained its pre-pandemic value of goods and services produced by companies in the state reaching $203 billion in 2023. The forecast predicts job growth will slow statewide, with economic strength concentrated in Oklahoma City and Tulsa.

Oklahoma’s population is predicted to grow by 1%, with stronger urban gains offsetting some rural population loss, in keeping with long-run patterns of urbanization across the U.S. Oklahoma is playing catchup relative to other states in terms of this trend. The metro areas accounted for 68% of the state’s population and 73% of state personal income in 2022, with those trends expected to carry through the decade. Urbanization and location along the Interstate-35 corridor position Oklahoma City favorably for long-run prosperity.

This article originally appeared in the February 2024 edition of VeloCity newsletter.