Metro Business Index Up for Year, Quarter

Article excerpt

By Lou Anne Wolfe

Journal Record Staff Reporter

Oklahoma City's general business index for the third quarter ended Sept. 30 grew 1.3 percent compared with the third quarter of 1991, Southwestern Bell Telephone Co. reported Monday.

The metro area business index was up 0.6 percent from the second quarter.

The statewide general business index rose 0.6 percent, compared with the 1991 third quarter, but fell 0.2 percent from the second quarter, the report said.

Tulsa's index rose 1.3 percent compared with the 1991 third quarter, but fell 0.2 percent from the second quarter.

The general business index, compiled by Bell and the Center for Economic and Management Research at the University of Oklahoma, is comprised of six economic sectors. During the third quarter, economic activity in half the sectors increased statewide, while activity decreased in the other half, the report said.

Real estate, general and consumer demand sectors posted gains, while agriculture, energy and manufacturing declined.

In the Oklahoma City metro area, the consumer demand, general and real estate subsectors posted over-the-year gains, while the energy and manufacturing subsectors declined.

"Oklahoma City continues to grow, although the growth tendencies are beginning to weaken," wrote Bell staff economist Craig Knutson.

"With over 23 percent of its workforce in the government sector, the metro Oklahoma City economy will no doubt suffer from Gov. Walters' recent announcement of employment freezes and furloughs."

Walters this month ordered all state agencies to implement an immediate hiring freeze on "non-critical" hiring and purchasing, estimated to reduce the state payroll by 500 to 1,000 full-time equivalent employees.

Government and services employment had been a primary contributor to Oklahoma City's ability to generate net new job growth over the past five years, the report said.

"If the governor's statements take effect in 1993, Oklahoma City will have to rely on its more diversified economic base to generate the type of job growth necessary to produce a seventh consecutive year of overall economic growth," wrote Knutson.

Addressing the state index, Knutson said that while slow growth was better than no growth, "the state's economy has much less vitality than previously forecasted. Including last year's performance, 1992 will be the second consecutive year of `underperformance.' "

Meanwhile, Tulsa's slight decline from the second quarter was only the fourth one since the first quarter of 1988, the report said. With manufacturing employment representing 17 percent of Tulsa's employment base, the 4 percent employment decline in the third quarter was a significant contributor to Tulsa's weak economic performance.

"While Tulsa's economy is almost 7 percent ahead of where it was three years ago, the rate of growth has declined significantly," Knutson said.

While Oklahoma continues to outperform the nation relative to unemployment rates, the state underperforms the nation in employment growth rates, he said. Year-over-year changes in wage and salary employment continue to run negative statewide. Through October, Oklahoma had posted nine monthly declines in the past 12 months, he said.

"Without growth in employment, then personal income, general revenues and retail activity are bound to suffer. Year-to-date performances for all three of these indicators support that contention," Knutson said.

Oklahoma's retail activity has been relatively strong, compared even with national trends, he said.

In September, TeleCheck Services of Houston reported that Oklahoma led in retail sales in the region that includes Texas, Missouri, Kansas and Arkansas, with an 8.5 percent rise from September 1991.

"However, as we close out the fourth quarter, that same company reports that retail sales `continue to lag in Oklahoma entering the third full week of the 1992 holiday shopping season,' " Knutson said. …