Economic growth rate to slow in 2008 before heading up in 2009

Wednesday, December 19, 2007

An Oklahoma State University economist expects 2008 to bring slightly slower job growth for Oklahoma at 1.3% or 20,000 new jobs, compared to this year’s projected 1.5% (22,600 new jobs) growth rate. 

The good news is that hiring should speed up again in 2009, said Dr. Mark Snead, director of the Center for Applied Economic Research.

Fewer new jobs are expected for Oklahoma in the year ahead due mainly to the effects of the national economy, including higher energy prices, the housing crunch and credit contraction, said Snead, who expects the state’s greatest hiring weakness to be housing-related construction and financial services industries. 

“The direct impact of the national housing market will be limited to modest hiring weakness in construction and softness in housing prices in Oklahoma,” Snead said.

At the same time, the ongoing boost from the state’s energy sector is expected to keep hiring in Oklahoma above the national average in 2008 and 2009, according to OSU’s latest economic outlook report. Snead expects job gains to remain broad-based this year, with slower growth in almost every primary sector.

While hiring in the Oklahoma City and Tulsa metropolitan areas has slowed, Snead said it remains strong. 

“I expect both Oklahoma City and Tulsa to experience a 1.5% gain in new jobs in 2008, which will mean an additional 8,600 jobs for Oklahoma City and 6,300 new jobs for Tulsa,” he said. “Rural areas should continue to produce energy-driven job growth rates near those of the metro areas.”

The state’s population has increased by one percent over the last year, while per capita personal income in Oklahoma has reached its highest level ($33,985 per person) compared to the U.S. average ($38,638 per person) since the oil bust in 1987.

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