State of Economy recap: 2021 looking better
Local and national experts shared their views how COVID-19 and the pandemic have impacted the city and state at the recent Greater Oklahoma City Chamber’s annual State of the Economy event, presented by Arvest Bank.
“The downturn due to COVID-19 is like nothing we’ve ever seen, but 2021 looks far better than the past eight months,” said keynote speaker Marci Rossell, Economic Forecaster, Former Chief Economist for CNBC and Co-Host of Squawk Box.
Rossell began by sharing her perspective on the how 2020’s downturn has been remarkably different as compared to that of 2008-2009. “Most downturns (recessions) begin in one particular sector and move out from there,” she said. “This time, the shock began outside the economy—almost like a natural disaster— and made its way into the economic environment very quickly.”
The first major blow was felt in job loss, which is typically the last thing to be affected. Rossell said it took only one month to see the damage to the workforce when it took 3 years in 2008-2009. But unemployment rates rebounded quickly, with the unemployment rate now at less than 10 percent.
Oil prices, always of interest to Oklahoma, are shown to be behaving in a very different way this time around. “In a typical recession oil prices decline but the role of oil has changed in the U.S. economy. If your economy depends on the production of oil then these low prices aren’t helping,” said Rossell.
There is economic optimism leading into 2021 thanks to the vaccine and the reduction of election stress, with Rossell predicting a “fireworks” recovery in 2021
“Sectors struggling right now like hospitality, travel and other high-touch service sectors will see explosive growth and a dynamic rebound come summer 2021.”
Kent Shortridge, Vice Chair of Economic Development for the Greater Oklahoma City Chamber and Managing Vice President –Operations for Oklahoma Natural Gas Company moderated the panel of local economists. Joining him were Robert Dauffenbach, Ph.D. Senior Associate Dean for Economic Development and Impact and Director of Center for Economic and Management Research, University of Oklahoma; Russell Evans, Ph.D., Associate Professor of Economics and Executive Director of The Steven C. Agee Economic Research & Policy Institute, Oklahoma City University’s Meinders School of Business and Mark Snead, Ph.D., Economist and President, RegionTrack.
Discussion included the oil and gas industry, the impact of aerospace and the continued resilience of the city.
“I am most encouraged by the resilience in the community, city leadership and the opportunity that comes out of hardship, but on the flip side there are concerns,” said Evans. “Things like empty office space, lack of labor force and closed store fronts. It won’t be a fast path to recovery and we will definitely have work to do but I am encouraged.”
Panelists agreed that aerospace—the number two industry in Oklahoma City behind oil and gas— is a stabilizing force.
“As far back as 2018 the aerospace sector has provided a significant boost to our economy,” added Snead. “The dollar stretches far in Oklahoma and the aerospace and defense industries know that. It keeps them looking to us.”
While panelists agreed the 2020 oil industry was going to be flat at best, it shouldn’t be counted out in 2021 and beyond. “The oil and gas industry will have their day again and we will see a turnaround post-Covid,” said Dauffenbach.
Final thoughts from the panelists praised Oklahoma City’s path. “We are on a good path to diversification and multifaceted economic identity. There are definite areas of economic strength Oklahoma City can capitalize on moving into 2021,” added Evans.
Special thanks to Presenting Sponsor Arvest Bank and Corporate Sponsors Enable Midstream Partners, OG&E and OU Health.