Oklahoma Business Conditions Index slips but remains in positive territory
BY LAURIE WINSLOW World Staff Writer
Tuesday, December 04, 2012
12/04/12 at 4:10 AM
A leading economic index for Oklahoma dropped in November but remained the second-highest in a nine-state region, according to a report Monday by economists at Creighton University in Omaha, Neb.
Oklahoma's Business Conditions Index fell to 56.1 from 63.3 in October; North Dakota's reading of 58.1 was the highest in the survey's Mid-America region.
The index, taken from a survey of businesses, is derived from new orders, production or sales, employment, inventories and delivery lead time. A number greater than 50 signals expansion in the next three to six months, and a number less than 50 points to economic contraction.
"Growth stemming from a very strong energy sector continues to push state economic growth higher" in Oklahoma, said Ernie Goss, director of Creighton's Economic Forecasting Group, in written comments. "In addition, both durable and nondurable goods producers continue to expand at a solid pace. For example, metal manufacturing and machinery production are growing at a healthy rate in the state.
"Our surveys over the past several months project healthy but somewhat slower growth for the next three to six months."
Oklahoma's confidence index, which is separate from the business conditions index, plunged to 46.7 last month from 59.2 in October.
Many factors are contributing to the lower confidence index, including lower energy prices, a slowing manufacturing sector both regionally and nationally, concerns about the "fiscal cliff" in Washington and health-care reform, Goss said in a phone interview.
Oklahoma still has some problems related to finding skilled workers, including welders and skilled manufacturing workers, he said.
Also, natural gas prices are low and oil prices have fallen somewhat, said Goss, citing a weaker global and U.S. economy.
The business conditions index for the Mid-America region rose to 48.0 from 46.5 in October but was below growth-neutral for the fourth time in five months.
Goss noted a great deal of economic variation among the nine states, with North Dakota, Oklahoma and Iowa outperforming the others - Arkansas, Kansas, Minnesota, Missouri, Nebraska and South Dakota.
Regionally, 70 percent of supply managers surveyed expect wage increases next year while 30 percent expect no wage increases. On average, supply managers project a 1.4 percent wage gain for next year, Goss said.
Original Print Headline: State business index down but still positive
Laurie Winslow 918-581-8466
Ernie Goss: "Growth stemming from a very strong energy sector continues to push state economic growth higher" in Oklahoma.