2014 Owasso Economic Outlook March 14, 2014 Mark C. Snead - PowerPoint PPT Presentation

2014 Owasso Economic Outlook March 14, 2014 Mark C. Snead President and Economist 0

The Owasso outlook continues to strengthen Summary: 1. Acceleration in local economic activity in 2013 2. Key fundamentals improved Job growth accelerating Sharp retail rebound Upward population revisions Housing maintains steady growth 3. Robust outlook for 2014 – near pre-recession pace 4. Growth should carryover into 2015 – new projects 1

Acceleration in job growth in 2013 now far outpacing the state and Tulsa region Owasso Private Wage & Salary Employment 12,000 10,896 10,596 10,000 4.4% 3.3% 1.6% 8,000 6,000 4,000 2,000 0 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13e Source: Bureau of Labor Statistics, Census, Bureau, RegionTrack 2

Recovery has been balanced and broad-based more ‘services - heavy’ in 2013 Owasso Job Formation – Goods vs. Services 12,000 10,000 8,000 6,000 Goods Services 4,000 2,000 0 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 1,200 1,000 Goods Services 800 600 400 200 0 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 -200 -400 Source: Bureau of Labor Statistics, Census, Bureau, RegionTrack 3

Industry structure shifting slowly toward services local shift to services more national-like than state Share of Goods vs. Services Private Sector Jobs - Owasso 100% Owasso 90% 78.8% 87.5% 80% OK Service-providing jobs 77.4% 76.2% 70% 60% 50% 40% 30% 23.8% 22.6% Goods-producing jobs OK 20% 21.2% 10% 12.5% Owasso 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bureau of Labor Statistics, Census, Bureau, RegionTrack 4

Some concern over bottom in jobless rate at 4.5% but labor force growth very positive Owasso & Tulsa MSA Unemployment Rate 10 Tulsa MSA 8 6 Percent 4 Owasso 2 0 2001 2003 2005 2007 2009 2011 2013 Source: Bureau of Labor Statistics, RegionTrack 5

Income and spending rebound accelerates regional sales share may be peaking Owasso Sales Tax Base and Growth Rates Sales at a seasonally adjusted annual rate, with X-12 trend 800 6-8%? 7-8% 600 3-4% $Millions 400 Retail Sales per Capita 25,000 10-12% 20,000 15,000 200 10,000 20%+ 5,000 0 00 02 04 06 08 10 12 0 2000 2002 2004 2006 2008 2010 2012 2014 Source: Oklahoma Tax Commission, RegionTrack Oklahoma Retail Outlook 6

Use taxes surge to record high in 2013 2014 projects should boost use tax stream Owasso Use Tax Base Sales at a seasonally adjusted annual rate, with X-12 trend 600 500 400 $Millions 300 200 100 0 2003 2005 2007 2009 2011 2013 Source: Oklahoma Tax Commission, RegionTrack Oklahoma Retail Outlook 7

Owasso among retail growth leaders 11 th largest city retail market in the state City Retail Sales Growth Past 12 Months *Cities with monthly retail sales above $10 million 12-mo Total 12-mo 12-mo Total 12-mo Rank City* (Jan-14) %chg Rank City* (Jan-14) %chg 1 Cushing $176,260,374 21.8 16 Ponca City 414,602,486 5.2 2 Chickasha 290,921,058 15.3 17 Durant 350,846,188 5.1 3 Bixby 285,281,096 12.8 18 Lawton 1,171,968,452 5.0 4 Grove 189,932,108 12.2 19 Glenpool 164,732,656 5.0 5 Mustang 243,399,185 9.7 20 Altus 270,831,275 4.6 6 Owasso 746,171,159 9.5 21 Stillwater 883,676,680 4.0 7 Edmond 1,721,348,885 9.3 22 Oklahoma City 11,433,978,801 3.8 8 Ardmore 589,511,978 9.1 23 Claremore 395,207,120 3.0 9 Elk City 456,390,619 9.0 24 Midwest City 921,366,835 2.9 10 Weatherford 246,497,356 8.9 25 Yukon 504,829,034 2.6 11 Warr Acres 157,938,385 8.6 26 Guthrie 166,551,236 2.4 12 Norman 1,946,704,258 7.9 27 Sand Springs 320,354,797 2.1 13 Ada 398,331,415 7.0 28 Tulsa 7,992,123,844 2.0 14 Moore 869,264,401 6.0 29 Okmulgee 161,421,739 0.9 15 Broken Arrow 1,314,041,401 5.7 30 Duncan 444,062,298 0.5 Source: Oklahoma Tax Commission, RegionTrack Oklahoma Retail Outlook 8

Recent Census population revisions to the upside some slowing in population gains Owasso Population Revisions and Forecasts 8% Prior Census Estimate Prior Forecast Current Census Estimate Current Forecast 6% 4% 2% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e 2014f Source: Census Bureau, RegionTrack 9

Owasso estimates inconsistent with similar cities upward revisions likely to 2012 population estimate Oklahoma City-Level Population Growth 8% 7% 6% Bixby 5% 4% 3% Jenks Glenpool Edmond 2% Owasso 1% State 0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Census Bureau, RegionTrack 10

Housing remains in recovery mode valuation gains mask weak unit growth Owasso Single Family Housing Permits 600 60 Value ($mil) 500 50 Units Value of New Single Family Homes Single Family Housing Permits 400 40 300 30 235 200 20 180 100 10 0 0 96 98 00 02 04 06 08 10 12 14 Source: Census Bureau, RegionTrack 11

Little change expected in Owasso’s status as a ‘bedroom’ or ‘out - commuting’ community Owasso Worker Inflow/Outflow Patterns 100% Living and Employed in Owasso 20.0% 17.5% 15.0% 12.5% 10.0% 90% 02 04 06 08 10 12 80% Living in Owasso but Employed Outside Employed in Owasso but Living Outside 70% e e 02 03 04 05 06 07 08 09 10 11 12 13 Source: Census Bureau, RegionTrack 12

External risks to the local expansion Concerns remain: 1. U.S. expansion is aging (4.5 years) 2. Shock from Europe still possible 3. Another Federal budget impasse 4. China growth implosion 5. Russian geopolitics 13

2014 Owasso Outlook a slightly faster version of 2013 Owasso will far outperform the Tulsa metro area and state in job growth Private wage/salary job growth: 2011: 1.6% (170 jobs) 2012: 3.3% (340 jobs) 2013: 4.4% (450 jobs) 2014: 6.2% (670 jobs) Most new jobs created in construction and health care. Further gains expected in trade, transportation, and professional & business services. Financial services continues to recover. Few manufacturing jobs added. Unemployment rate should move toward 4% 14

2014 Owasso Outlook, cont. Retail sales robust: 8.5% in 2014 (cyclical and new retailers) Population growth bounces to 3.7% in 2014 – more upward revisions Housing repeats 2013 with modest activity Conditions are setting up well for 2015 15

2015 Could be Strong Surge Year Strong momentum should be in place for 2015 surge: • continued cyclical recovery • added retail boost • construction and hiring impacts from distribution center • strong sales and use tax growth • low double-digit job growth likely 16

2014 Owasso Economic Outlook mark.snead@regiontrack.com 17