The Changing U.S. Economy What Does It Mean For OklahomaPresentation Transcript
The Changing U.S. Economy: What Does It Mean for Oklahoma?
Oklahoma City Branch Executive
Federal Reserve Bank of Kansas City
Governor’s Council for Workforce and Economic Development April 10, 2006
I. The U.S. Industrial Structure of the Future
The structure of the U.S. economy will change over the next 5-10 years. Why?
The short answer is:
Because it always has. Source: U.S. Bureau of Labor Statistics
The longer answer includes several inter-related factors:
Changing consumer tastes
Changing workforce skills
The latest projections go through 2014 and were finalized in late 2005.
How will the structure of the U.S. economy change over the next 5-10 years?
Obviously no one knows exactly.
One respected source is the U.S. Bureau of Labor Statistics, whose economists do detailed 10-year projections of industrial and occupational employment every other year.
15 U.S. industries projected to ADD jobs the fastest through 2014*
* Among industries with more than 100,000 employees
Business services 3. Management consulting services 5. Facilities support services 6. Employment services 7. Office administrative services 13. Accounting, tax, & payroll services High-tech services 2. Software publishers 8. Computer systems design Health and social services 1. Home health care services 4. Residential care facilities 9. Outpatient & laboratory services 10. Child day care services 12. Offices of health practitioners 15. Rehabilitation services Education services 11. Other educational services 14. Colleges & universities Source: U.S. Bureau of Labor Statistics
15 U.S. industries projected to SHED jobs the fastest through 2014*
* Among industries with more than 100,000 employees
Nondurable manufacturing 1. Cut and sew apparel mfg. 2. Fabric mills 3. Basic chemical mfg. 6. Rubber product mfg. 8. Synthetic materials mfg. 13. Pulp & paper mills 14. Petroleum & coal mfg. Durable manufacturing 4. Industry machinery mfg. 5. Electrical equipment mfg. 7. Foundries 10. Computer mfg. 12. Metalworking machinery mfg. 15. Other machinery mfg. Natural resources 9. Sawmills & wood preservation 11. Crop production Source: U.S. Bureau of Labor Statistics
II. Industrial Structure and Future Oklahoma Job and Income Growth
In addition, states with favorable industrial structures tend to grow even faster than one would expect, due to spillover growth to other industries.
How much impact does a changing U.S. industrial structure have on state job growth?
Research suggests about 15-20 percent of the variation in state job growth rates over 10-year periods can be explained by industrial structure.
Annual employment growth, 2004-2014 if states’ industries grow at projected national rate Source: U.S. Bureau of Labor Statistics 1.30%-1.50% 1.20%-1.29% 1.11%-1.19% 0.98%-1.10%
The 10 industries contributing the most to differences between OK and US projections Source: U.S. Bureau of Labor Statistics Small Positive Semiconductor & electronic mfg. 10 Large Negative Support activities for mining 9 Large Negative Federal government 8 Small Negative Educational services 7 Large Negative Nonagriculture self-employed workers 6 Large Positive Employment services 5 Small Positive Cut and sew apparel mfg. 4 Small Negative Computer systems design 3 Large Negative Oil and gas extraction 2 Large Negative Agricultural products (grain, livestock) 1 Presence? Contribution? Industry or Small Negative Due to Large Positive or
Oklahoma City is projected to have a higher share of the long-term job growth Source: U.S. Bureau of Labor Statistics Percent
The net effect of expected changes in the mix of jobs is to raise average salaries in OK Source: U.S. Bureau of Labor Statistics
U.S. and Oklahoma job growth is projected to be fastest among high-paying occupations Projected Annual Job Growth by Average Pay Through 2012 Source: U.S. Bureau of Labor Statistics
III. Meeting Oklahoma’s Future Workforce Needs
From 1994-2004, OK met its employment demand largely by population growth… Source: U.S. Bureau of Labor Statistics, U.S. Census Bureau Average annual growth in employment and working age population, 1994-2004 Percent
… but also by increased labor force participation Oklahoma United States Source: U.S. Bureau of Labor Statistics
Meeting future job demand could be a little tougher Sources: U.S. Bureau of Labor Statistics, U.S. Census Bureau Projected annual growth in employment and working age population, 2004-2014 Percent
Non-metro Oklahoma may have an advantage: an untapped labor supply Source: U.S. Census Bureau
Oklahoma must ensure potential workers obtain the training necessary to succeed Source: U.S. Bureau of Labor Statistics
Oklahoma’s share of college graduates is slightly lower than in the U.S. Source: U.S. Census Bureau
The industrial structure of the United States is expected to continue to change in the years ahead
Oklahoma’s intermediate-term outlook for jobs and incomes, based on industrial structure, is slightly less favorable than the nation’s
A challenge for Oklahoma heading forward will be finding and training the workers needed to fill the jobs of the future