Newspaper article THE JOURNAL RECORD

Clouds amid Bright Spots: Education, Infrastructure Will Hinder State's Long-Term Growth, Economist Says

Newspaper article THE JOURNAL RECORD

Clouds amid Bright Spots: Education, Infrastructure Will Hinder State's Long-Term Growth, Economist Says

Article excerpt

OKLAHOMA CITY - The state's metro areas are still the bright spot in Oklahoma's economy, bolstered by oil and gas, manufacturing and aerospace industries, experts said. Yet a lack of investment in education and infrastructure will hinder the Sooner State's long- term progress, said Mickey Hepner, dean of the University of Central Oklahoma College of Business.

Hepner sat on a panel of economists at the Greater Oklahoma City Chamber's fourth-annual luncheon Wednesday at the National Cowboy & Western Heritage Museum. He said the state may need to raise taxes to grow.

Rapid growth in the oil and gas industry and accompanying manufacturing sector supported Oklahoma's growth in the first two years after the Great Recession, said Oklahoma City University economics professor Russell Evans. He said he is mostly optimistic about the state's economy.

The oil and gas industry directly employs one in five workers in the state. When accounting for related service sectors such as pipeline construction, manufacturing and machinery production, oil- and gas-related businesses employ one in two workers in Oklahoma. Yet growth in those oil-related-industries plateaued in mid-2013, he said.

However, the industry is not headed for a bust, despite rapidly declining crude prices, Evans said. In the oil bust of the 1980s, there were several supply shocks from wars and embargoes, and those shocks led to the fall of Penn Square Bank. Because there was no federal support after the bank went belly up, Oklahoma felt the pressure more than other states.

Now other major world oil producers can't afford a sustained drop in oil prices and are likely to adjust production accordingly, he said. For example, Russia and Venezuela in particular depend on oil revenue to balance national budgets, and they face social unrest with reduced revenues.

Though the panelists were mostly optimistic about the overall Oklahoma economy, both Hepner and Oklahoma State University professor Dan Rickman were concerned about infrastructure investment. …

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