Mickey A. Hepner
Associate Professor of Economics
Director of UCO Policy Institute, University of Central Oklahoma
The latest economic data firmly show that the Oklahoma City metro area is joining the state and national economies in emerging from the Great Recession of the last few years.
While there have been a number of indicators that the local economy is improving, recent data from the U.S. Bureau of Labor Statistics offers the best news yet. That data finds that February marked the first month that the OKC economy created new jobs since the recession first reached the Sooner State.
Throughout the last year, the OKC economy averaged shedding more than 6,000 jobs per month, with a low point of 11,000 jobs lost in October 2009 alone. Since then, however, the local labor market has steadily improved, culminating in the 3,000 new jobs created in February. This is one case where the trend is definitely OKC's friend.
Of course, the metro avoided the brunt of the national recession, mainly due to the peculiarities of our economy. While other states rejoiced during the housing boom and recoiled during the housing bust - a bust that has left many homeowners nationwide with negative equity in their homes - the abundance of land in Central Oklahoma tempered the rise and subsequent fall of our housing prices. While other states have seen their manufacturing base decimated during this recession, Oklahoma has always relied more upon the energy sector than manufacturing. While other states suffered from the panic that sent America's financial sector to the brink of collapse, Oklahoma had relatively little exposure to those "too big to fail" firms at the heart of the crisis.
Thus, the nature of our state economy meant that while we were never "recession-proof," we were "recession-resistant," at least to this particular strain of recession.
This does not mean that the OKC economy faces only smooth seas ahead. During the spring of an economic recovery, it is only fitting that some economic storm clouds lie ahead. The OKC economy has two distinguishing characteristics that separate it from the economies of other cities across the nation: 1) our reliance upon energy, especially natural gas, and 2) our reliance upon government.
On the first front, there is clearly some good news: Energy prices have rebounded from their lows and appear to have stabilized. Furthermore, there is a growing consensus across the nation that natural gas - the heart of Oklahoma's energy industry - is the clean fuel of the future.
However, the second front - our reliance upon government spending - is where the storm clouds are gathering. As a result of both proximity to Tinker Air Force Base and being the seat of state government, Oklahoma City is more reliant upon government employment than most large cities. In fact, this reliance upon government employment is a major reason why our unemployment rate remains well below Tulsa's. Unfortunately, the lingering effects of the Great Recession, as mild as it was here, likely means that state government spending will remain below pre-recession levels for years, dampening the strength of the recovery.
Still, there is much to be excited about in the economic future of Oklahoma City. So let the word go forth: The recession is over, and the recovery is here.