December sees decline in business conditions

MEASURE CONTINUES TO POINT TO GROWTH DESPITE FALL

TULSA — A leading economic gauge for Oklahoma slipped further in December, economists at Creighton University reported Tuesday.

The Oklahoma Business Conditions Index last month declined in December to 52.1 from November’s 52.5 and October’s 53.9.

The index, derived from a survey, is a mathematical average derived from new orders, production or sales, employment, inventories and delivery lead time.

Even with the decline, the index points to continued economic growth, although slower. A number greater than 50 points to expansion in the next three to six months, while a number less than 50 indicates contraction.

Oklahoma’s economy did much better in 2011 than the region and the nation, and for the first half of 2012 its economy also is stacking up to be better than the region and nation, said Ernie Goss, head of the Economic Forecasting Group at Creighton in Omaha, Neb.

Components of the state’s leading economic indicator for December were new orders at 52.3, production or sales at 52.1, and employment at 51.0.

“Durable goods manufacturers expanded business for the month and year. Pullbacks were recorded for nondurable goods manufacturers,” Goss said.

Oklahoma’s projected job growth for 2012 is 1.5 percent compared with 2.8 percent for 2011.

Last year, the state’s 4.6 percent inflation-adjusted gross domestic product was the second-highest in the region, behind North Dakota’s 6.8 percent GDP.

For 2012, in the survey’s nine-state Mid-america region, Oklahoma again is projected to have the second-highest GDP growth at a forecasted 3.3 percent behind North Dakota’s 5.7 percent.

Oklahoma’s confidence index, which is separate from the overall index, rose to 62 last month from 52.2 in November.

Some of those surveyed pointed to an energy sector that still looks strong and a pickup among retailers. Concern remains about the European economic turmoil, Goss said.

He cited one survey respondent who replied, “As the new year begins to unfold, we are seeing more activity more quickly than we originally anticipated. … It sure is taking off around here.”

Goss said he still doesn’t think the holiday buying season was as strong as early news would indicate. He looks for retail sales nationwide to come in 4 to 5 percent above last year’s sales.

For Oklahoma, retail sales could be anywhere from 5 to 7 percent stronger, he said.

On average, supply managers expect a 1.6 percent pay raise in 2012, according to the report.