Regional Report: The Southwest's Emerging Sectors Warm Up Recovery
The economies of Arizona, New Mexico, Oklahoma, and Texas are experiencing strong signs of economic recovery in established and emerging sectors.
Mali R. Schantz-Feld (September 2010)
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The Oklahoma economy is on the cusp of a job recovery, according to Robert C. Dauffenbach, director of the Center for Economic and Management Research at the Price College of Business. "Having lost 5.2 percent of its jobs from a peak non-farm employment level of about 1.6 million jobs, the recent months of March through May have yielded substantial gains of 16,000 jobs statewide. On a year-over-year basis in May, the total job count is down less than one percent," Dauffenbach says.
Manufacturing and energy industries are showing employment gains, with health services industries leading. "Another sign of relative strength in the Oklahoma economy is construction employment with an April 2010 job total at 69,300, only 100 short of the previous year's level," he says. Statistics concerning building permits, retail sales, and tax collections also show that "the Oklahoma economy appears to be in a recovery mode that is beginning to establish its own momentum."
Alternative energy is powering Oklahoma's future. Eagle Claw Fabrication will build a $28 million, 150,000-square-foot wind turbine tower production facility at the Port of Muskogee that is expected to create 175 jobs. Operations are scheduled to begin in spring 2011 and move to full capacity later that year. Eagle Claw chose the site for its access to the McClellan-Kerr Waterway, which provides the company substantial transportation savings, says Eagle Claw founder Tom Word. The port also offers access to markets not otherwise reachable from an inland location. The firm will acquire raw steel material and distribute turbine towers, its finished goods, by truck, rail, or barge.
Aerospace remains one of Oklahoma's strongest sectors. Tulsa and Oklahoma City have a majority of the state's more than 500 aerospace-related companies. Tinker Air Force Base in Oklahoma City is the largest military aircraft repair facility in the world, according to the Oklahoma Aeronautics Commission. It's also the state's largest single-site employer, with a work force of 27,000 people and an annual economic impact of more than $3 billion.
Texas' economy is reaching upward. "Texas entered 2009 with its economy mired in recession, a consequence of the global financial crisis, collapsing energy prices and falling exports. After outperforming the nation the previous four years, the state experienced steep declines in economic activity last year that nearly matched the U.S. freefall," reported the Federal Reserve Bank of Dallas' Southwest Economy. However, at the end of 2009, the labor market began to show positive signs across manufacturing, exports, housing, energy, and transportation. The Dallas Fed's Texas Manufacturing Outlook Survey predicted continued expansion this year, with indexes for new orders and shipments signaling moderate manufacturing growth.
"Texas' economic recovery is on track," stated Texas A&M's Real Estate Center in a July 2010 report. Education and health services; mining and logging; professional and business services; leisure and hospitality; manufacturing; and transportation, warehousing, utilities, and the government sector had more jobs in June 2010 than in June 2009, the report found. And the honors from media outlets are coming in. Texas won Area Development's Silver Shovel award this year. In July, CNBC named Texas America's best state for business for the second time. CEO Magazine named it the best state to do business for the sixth year in a row, and Forbes dubbed six of Texas' metro areas recovery capitals. Austin's government and tech sectors, Dallas and Fort Worth's major corporate operations, Houston's oil industry ties, and San Antonio's military presence all helped these metros recover from the recession quickly.
Governor Rick Perry announced on his Facebook page a $1.4 million investment through the Texas Enterprise Fund (TEF) for Facebook to create a sales and operations office in Austin that will generate 200 jobs and more than $3.1 million in capital investment. TEF will also help fund Allstate Insurance's San Antonio bilingual customer information center, Natura World's Wichita Falls manufacturing facility and corporate headquarters, and Hanger Orthopedic Group's Austin headquarters relocation.
Across these sunny states, economic recovery is heating up. Based on the positive growth thus far, it seems likely that the region will continue to experience this business-based warming trend.