State of the Economy recap: where we’re heading in 2022

The Chamber’s annual State of the Economy event brought valuable insight and perspective surrounding Oklahoma City’s industries and how to navigate the future of business.

Our city grew by more than 100,000 residents between 2010 and 2020, making us the 22nd largest city in the United States. With this growth, we’ve seen expansion in the industries of aerospace, manufacturing, film, retail, biotechnology, and more. Additionally, the Chamber and others local organizations have worked together to support the success of new business ideas with accelerator programs like gBeta Oklahoma City.

Last year, the Chamber’s Economic Development team helped 50 companies bring 3,800 jobs to our community. With those jobs came an additional 150 million dollars in payroll and 293 million dollars in capital investment. Though the world remains in a strange place with the ongoing pandemic, Oklahoma City continues to make progress towards an even brighter future.

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Before the event’s keynote speaker, Dr. Bill Conerly, delivered his pertinent address, the crowd gained deeper insight into the regional economy from a panel discussion composed of three economic experts. Panelists included Robert Dauffenbach, Ph.D. from the University of Oklahoma; Russell Evans, Ph.D. from Oklahoma City University’s Meinders School of Business; and Mark Snead, Ph.D. from RegionTrack, Inc. The panel was led by the Chamber’s Vice Chair of Economic Development, Kent Shortridge.

Shortridge opened the panel discussion by asking, “In looking at the state and Oklahoma City metro economies, what are the areas that you are most encouraged about? And, on the flip side where are you most concerned?”

“I am most encouraged about the ending of the pandemic and return to work,” said Dauffenbach. “We see growing recognition of Oklahoma City throughout the nation, and every month we see job growth. We definitely see energy rebounding.”

Dauffenbach said his largest concern surrounds how we will navigate the return to work, given an impressively low unemployment rate.

“I feel like every year for the last ten years we’ve started out the year by saying ‘this is a strange year,’” said Evans. “For me one of the strongest signs of concern is that it’s unclear how much of today’s economic reality is sort of an induced economic euphoria that’s not real or is unsustainable.”

Snead’s largest concern for our city seemed to be our dependence on oil and gas, though he recognizes the encouraging presence of emerging industries. “The long run story of Oklahoma City hasn’t changed a bit. It’s turned into a really cool place to live and work,” said Snead. “What could have been a disastrous year has turned out to be a good one…we have a lot of momentum going into 2022.”

The panelists were asked to provide clarity surrounding a question we’ve all been curious about: where have all the workers gone? The answer to this question, and part of the reason we’ve all struggled to find it, is complex.

According to Evans, the number of people in Oklahoma City who are participating in the labor market is back to pre-pandemic levels. Though when you look at employer’s payrolls, the number of people they have employed is far below pre-pandemic numbers. Evans said one possible explanation is that “these are people that before the pandemic had two part-time jobs and they showed up on two different payrolls, but now they have one full-time job and they only show up as one person on a payroll.” This potential reality tells a story of upward mobility, which is a positive way to look at the current situation of our labor market and 1.9% unemployment rate.

Collectively, the panel said that there will be a process of restructuring as businesses navigate expectations of their workers, the potential of robotics and machinery to supplement jobs, and how wages may need to increase if we intend to encourage individuals who have left the labor market to return to it.

The tumultuous prices of oil and gas was also a topic of discussion for the panel. Over the past year, the industry has seen huge price increases and drops, without much control over the future. Snead said, “the industry has learned over the years that there's nothing they can do to smooth prices.” It’s possible our oil and gas sector in Oklahoma will continue to become smaller, though become more profitable with the transition. “I really am beginning to think that, that these shifts in the industry, are going to inevitably put upward pressure on prices,” added Snead.

Another important point covered by the panel concerned rates of inflation. “The fact the matter is there's growing concern that the Fed may have been in this game of stimulating the economy through bond purchases for too long,” said Dauffenbach. In contrast to previous methods of financial policy, the pandemic response was to inject directly into the money supply, which has caused issues.

“I think we learned a few things in this cycle. One is that it's really hard to trigger inflation, and the thing we've learned from the old cycle is it's really hard to stop it once you have triggered it.,” said Snead.

“We're driving money into real estate and stock markets and into riskier assets and out of traditional, safe assets. There's so much liquidity in the system right now that we actually had to invent an even riskier asset, like non-fungible tokens,” said Evans. “I think the federal reserve is trying to signal that they're closer to moving on short-run interest rates than maybe a lot of market participants are willing to acknowledge.”

Overall, the panel provided an enlightening discussion, covering several important challenges and opportunities currently faced by our business community and population at large. As we enter a new year, we’ll continue to see growth and change within our city as businesses navigate the optimal path forward.

Special thanks to Presenting Sponsor Arvest Bank for making the 2021 State of the Economy event possible.