Tulsa World: Economic gauge turns south

MAKE US YOUR HOMEPAGE | Saturday, November 21, 2009 | WIRELESS

Home > Business

Newspaper View Print this story

Comment

RSS

Bookmark

Economic gauge turns south
The Oklahoma Business Conditions index reversed course in September.

By LAURIE WINSLOW World Staff Writer
Published: 11/3/2009 2:20 AM
Last Modified: 11/3/2009 8:05 AM

An economic gauge for the state turned negative in October.

After pointing to signs of growth in September, Oklahoma's Business Conditions Index reversed course and fell below growth-neutral to 46.9 last month from 52.9 in September. The gauge was just above 45 in August.

A number greater than 50 indicates that the economy should expand over the next three to six months, while a number below 50 points to contraction.

"If you look at the numbers in Oklahoma, they're getting weak," said Ernie Goss, an economics professor at Creighton University in Omaha, Neb., in a phone interview. "Oklahoma came to this downturn much later than the nation, and it's now showing up in our survey.

"Even though the number is below growth-neutral, I think it will be somewhat short-lived."

Also, the state's confidence index for last month dropped to 33.4 from 53.9 in September.

Natural gas prices have been down, Goss noted, and even though oil prices are up, drilling is not strong. But Goss said he, like most analysts, is fairly positive about the energy sector.

"You've got to be somewhat bullish on energy for 2010," he said. "Even though this recovery is still weak, the international recovery is certainly looking stronger, and that's going to bode well."

Since the national recession began in December 2007, Oklahoma has lost 2.0 percent of its employment, with all of the loss occurring since October 2008, according to the Creighton report.

Based on survey results over the past several months, Goss said he expects Oklahoma's jobless rate to climb by another 0.4 percent by the end of the year.

Oklahoma's jobless rate edged down to 6.7 percent in September from 6.8 percent in August, but economists have said it's too early to call the lower rate a trend.

Of the Creighton index's individual components, Oklahoma's employment index in October was above growth-neutral at 54.0, which Goss called "a mystery."

Durable goods manufacturing has grown weak in Oklahoma, Goss said, pointing to pullbacks in the production of drilling machinery and automobile parts.

The index for the nine-state Mid-America region slumped to 51.8 last month from September's 56.2 In addition to Oklahoma, the region includes Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota.

Goss said the path out of recession is more fragile than he previously thought.

"This month's decline suggests that the economic recovery under way is going to be a disappointing one," he stated in written comments.

"In fact, the volatility and level of the overall index over the past several months indicates that a double-dip recession is a growing possibility.

Downturns in farm income, in addition to legislative uncertainty in Washington, are having negative impacts on the regional economy."

Goss noted that uncertainty surrounds energy and health care reform legislation.

Looking ahead, businesses don't know what is going to happen with their health insurance bills, cap and trade legislation or their tax rates.

"That's why I think you've got these numbers that are not as strong as you would like to see," Goss said.

Laurie Winslow 581-8466
laurie.winslow@tulsaworld.com By LAURIE WINSLOW World Staff Writer

Newspaper View Print this story

Comment

RSS

Bookmark

Reader Comments

Show: Most Recent Comment First

Add your comment

2 comments have been made on this story so far. Tell us what you think below!

Reporting Comments

If you see a comment that violates our terms and conditions, please help us by clicking the "Report this Comment" link next to a comment. That will alert the web staff to review the comment. Thank you. -- Web Editor Jason Collington

Some reader comments for this story were copied from "Economic indicator low for Oklahoma in October," which was published on 11/2/2009.

	Report Comment 007, Tulsa (11/3/2009 10:24:24 AM) Oklahoma has always lagged behind the rest of the nation whether going into a recession or coming out of it.
	Report Comment magnumpi28, (11/4/2009 1:59:13 AM) 007- You are 100 percent correct.

Add Your Comment
In order to post a comment on this article, you must sign in to Tulsaworld.com. If you do not have a site account, you can create an account for free.