Newspaper article THE JOURNAL RECORD

Steady Economic Growth Forecast for State in '90

Newspaper article THE JOURNAL RECORD

Steady Economic Growth Forecast for State in '90

Article excerpt

Slow and steady economic growth at a rate parallel with the national economy is in store for Oklahoma this year, according to the Oklahoma Economic Outlook report released Wednesday by Oklahoma State University.

The report, prepared by the Office of Business and Economic Research at the College of Business Administration, uses a 250-equation model of the state economy.

The year 1989 closed a volatile chapter in the history of Oklahoma's economy, it said.

"It took the state seven years to build up to the energy boom/bust year of 1982 and it has taken another seven years to stage some semblance of recovery," said Robert Dauffenbach, director of the research office.

"Now that the adjustments are in place, the Oklahoma economy is in a much better position to achieve economic growth that parallels its neighbors and the nation."

Gross state product, the broadest measure of the state's economic performance, is forecast to reach $61 billion this year, up from $57.4 billion in 1989.

After adjusting for inflation, this represents a 1.9 percent real rate of economic growth, about equal to prospects for the national economy, the report said.

Gains in manufacturing, wholesale and retail trade, and services will be chief contributors to real output growth, the report said. The mining and construction sectors should be stable.

Nonagricultural wage and salary employment for 1989 should show a 0.5 percent gain over 1988, the report said. The approximately 1.1 million workers in that category last year are expected to grow this year by 8,000 people, or 0.75 percent.

The unemployment rate trended downward in 1989 and is expected to remain stable this year, the report said.

Real personal income in 1989 rose by 1.8 percent, and continued growth by 2 percent to $36 billion is forecast this year.

From 80 percent of the national figure in 1989, Oklahoma real personal income should reach 81 percent of U.S. income this year, the report said.

Oil prices are expected to undergo some mid-year weakness and then recover later in the year. The refiner's average acquisition price of oil should remain in the $17.50 per barrel range, the report said.

The natural gas price is expected to climb to $1.89 per million cubic feet at the wellhead, the report said, and many forecasters have natural gas prices climbing steadily into the 1990s.

Oil prices in 1989 were less volatile and somewhat higher than the previous year, which helped the Oklahoma economy, the report said.

Natural gas prices were stable, and natural gas is beginning to be recognized as an important fuel of the future in the wake of mounting environmental problems, it said.

"The state economy is now beginning to move significantly off the shallow-bottom of activity achieved in 1987-88," Dauffenbach said.

Key to Oklahoma's improvement is a strong national economy, which is into its seventh year of economic expansion for a peacetime record, the report said.

The report said no national recession is predicted by the firm that provides a national forecast for the Oklahoma State Econometric Model.

However, national economic growth is expected to be weak during the first half of this year. Real gross national product is expected to grow by 1. …

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