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OKC metro forecast for job growth in 2021
In 2021, the Oklahoma City metro should benefit from improved economic conditions as the nation gradually exits the pandemic economic reality and the bottom to the current energy cycle. Combined, these factors set the stage for a return to more traditional growth in 2022 as the Oklahoma City region builds upon pre-pandemic levels of economic activity.
These findings are part of the Chamber’s annual Greater Oklahoma City Economic Forecast which provides a comprehensive analysis of the national, state and metro economies. It details historic trends, a snapshot of the current situation, as well as a forecast for the coming year.
Overall in 2020, year-over-year nonfarm annual job growth declined by 3% (19,700 jobs) in the Oklahoma City MSA. The largest percentage year-over-year job gains were found in transport/warehouse/utilities (+3.2%), retail trade (+2.9%), health services (+2.4%), financial services (+0.7%), and scientific services (+0.5%) sectors.
The largest declines were found in oil & gas (-30.7%), wholesale trade (-9.9%), information (-9.0%), leisure services (-8.5%), food services & administration (-6.2%), administrative support (-6.1%) and manufacturing (-6.0%).
Positive Oklahoma City metro job growth in 2021 is expected, with the more optimistic job forecast scenario growing by 3.2% percent or approximately 20,500 jobs by the end of 2021. This growth parallels expectations for the nation. An alternative scenario that models a more pessimistic start to 2021 demonstrates Oklahoma City MSA job growth at 1.5% or just under 10,000 jobs added by the end of the fourth quarter – and overall job totals still below 2019 levels. The local economy remains vulnerable to national and global uncertainties surrounding Covid-19 that may cause a delay in improved economic conditions.
UNEMPLOYMENT RATES REMAIN LOW AFTER SIGNIFICANT FLUCTUATION
The Oklahoma City metro completed 2020 with an annual average unemployment rate of 6.5%, with monthly unemployment rates ranging as low as 2.7% in March and as high as 14.8% in April. Heading into the pandemic, the Oklahoma City MSA had the lowest unemployment rate among all large metros in the nation; and the lowest again in September. Unemployment rates in the final five months of the year closely paralleled what the metro saw coming out of the 2009 recession.
VALUE OF CONSTRUCTION PROJECTS
According to Dodge, in 2020 the total construction value of tracked contract projects (residential, non-residential, and non-building infrastructure) in the Oklahoma City MSA was $3.5 billion, 6 percent less than the prior year. The largest positive gains were found in hotels and motels, hospitals & health, and religious buildings. The largest declines were in office & banks, government service, and miscellaneous nonresidential buildings. For 2021, total construction value of contract projects is forecasted by Dodge to be relatively flat and decline by 3%, with small positive gains in both non-residential and residential. A large 21% decline is expected in non-building (bridges, water supply systems and other), bringing total construction value into negative territory compared to 2020.
JOB GROWTH AND ANNOUNCEMENTS FROM CHAMBER-ASSISTED COMPANIES
2020 brought about the fifth year of a five-year economic development program called Forward Oklahoma City V. This is the fifth iteration of the Forward campaign that has provided longer term strategic planning to the region’s economic development initiatives over the past twenty-five years.
Since 2016, 23,914 jobs with payroll in excess of $1.2 billion, and $2.2 billion in capital investment has been announced by Chamber-assisted companies.
In 2020, 49 Chamber-assisted companies announced plans for the creation of 3,866 jobs with an annual average salary of $54,983. In addition, those same companies announced more than $307 million in capital investment and $212 million in payroll. The Greater Oklahoma City Chamber ended 2020 with 58 active projects in its economic development pipeline. The pipeline tracks companies or projects that are potentially looking to relocate or expand in the Greater Oklahoma City region. The largest number of projects by facility type included manufacturing, office, distribution, aviation, and shared-services/call center.
The Greater Oklahoma City region was the beneficiary of several new-to-market announcements and significant expansions in 2020. A select group of those announcements are described below.
May 2020 brought news of Costco considering Oklahoma City for a back-office / financial services operation that would employ more than 1,000. That ultimately culminated in expanded projections of 1,503 new jobs for the Costco Member Services Center over the next five years and the purchase of the former 234,000 square foot Hertz call center location at 14501 Hertz Quail Springs Parkway in Oklahoma City. Jobs include agents, clerks, administrators, computer and other technical experts, trainers, quality technicians, supervisors and managers. Part-time and seasonal employment opportunities will also be available.
Hawaii’s North Star Scientific Corporation (NSS) announced an expansion to Oklahoma City, starting with five employees and plans for 40 jobs at the facility once operations ramp up. NSS designs, develops, and qualifies state of the art electronic systems for Department of Defense applications and delivers reliable high-performance products and services. They specialize in radar frequency systems designs and rapid research & development/custom solutions. Their offices are located in the Valliance Bank Tower on Northwest Expressway.
Amazon also announced plans in December to open a new fulfillment center in 2021, creating more than 500 new full-time OKC jobs in the process. The new facility on S Portland Ave. will have the capacity to serve as a “last-mile” location and handle larger items. Amazon now employs approximately 5,000 people in Oklahoma City.
In June, Skydweller Aero Inc. selected OKC for its U.S. corporate headquarters, with plans for 120 engineering and field tech jobs in OKC, along with testing facilities in Ardmore. The company is involved in producing solar powered perpetual endurance unmanned aircraft.
Other aerospace news in 2020 included expansion plans from Kratos, which produces unmanned aircraft for the U.S. military. In July, the company announced the award of a five-year indefinite delivery, indefinite quantity contract valued at up to $400 million for the development, integration and prototype air vehicle delivery in support of the U.S. Air Force’s Skyborg program, with much of the work to be done in Kratos’ OKC facility. Malarkey Roofing Products announced that it will be adding 105 jobs and additional capital investment to its existing facility to address growing business demand. Malarkey is a manufacturer of high-performance residential and commercial roofing products. Heartland Payment Systems, Paycom and Boeing are a few additional existing companies in Oklahoma City to have added jobs in 2020 or to have announced plans to add jobs.
For the seven-county Oklahoma City metropolitan area, 2020 total taxable retail sales decreased by 5.5% from 2019 totals. This follows three consecutive years of positive year-over-year percent increases. At approximately $22.6 billion, the Oklahoma City metro accounts for more than 43% of the taxable retail sales for the entire state of Oklahoma and 36% of the state’s population. This continues to make the Oklahoma City metro a driving force for retail trade in the state.
Destination retail strategies and shop local campaigns continue to be important to produce increased sales tax revenue for the Oklahoma City region. For FY 2020 (July 2019 to June 2020 remittance), sales tax collections for the City of Oklahoma City were relatively flat, down slightly at 1.1% percent over prior year. For the last half of CY 2020 (July 2020 to December 2020), sales tax collections remained below prior year for the City of Oklahoma City, but use tax collections increased considerably primarily driven by online retail sales.
Sales tax collections by surrounding cities in the metro increased in the second half of 2020 as a result of more people shopping closer to their homes. Cities seeing increases include Norman, Edmond, Moore, Midwest City and Yukon. This follows national trends of suburban communities temporarily benefiting from changes in commuting patterns related to work-from-home policies and fewer opportunities to visit destination retail establishments offered by core cities.
According to the Price Edwards 2020 OKC Year End Retail Market Summary, retail vacancy in the Oklahoma City market increased to 9.7% at year end, up slightly from 8.7% a year ago and 9.2% at mid-year 2020.
A few select retailers that announced or opened new locations in the Oklahoma City metro in 2020 include Chicken N Pickle, Homeland, Scooter’s Coffee, Blue Zoo, Round1 Bowling & Amusement, Chicken Foot, HTeaO, Phat Tire Bike Shop, Costco, Edmond Railyard, Park 17, Old Navy, Aldi Grocery, Nashbird, Pinkitzel, Shell Belle’s Bakery, Tavola Restaurant, Commonspace Game Café, and Oklahoma Axe Factory.