General Economic Conditions
The discussion of economic conditions was written between July and August 2020. The inconsistent responses of federal, state, and local governments and communities to the COVID-19 pandemic, make analysis and forecast of the economy difficult if not impossible. This discussion centers mostly around Oklahoma economic conditions. Oklahoma has a considerable rural population that have experienced the pandemic to a slower degree than urban areas due to less population. The pandemic has affected southwest Oklahoma greatly as our economy relies heavily on our State and other outside influences. Due to the quickly changing economic effects of COVID-19, please consider this information and the timeframe when reading this report.
Oklahoma has experienced dramatic economic fallout from both the business shutdowns associated with the COVID-19 pandemic and the preceding collapse of the energy sector. Between November 2018 through March 2020, Oklahoma’s oil and gas sector shed jobs at an alarming rate, the sector has reduced 40-50% of its workforce. Although the Oklahoma economy and other state economies opened sooner than anticipated and began to robustly recover, the resurgence of the COVID-19 virus has begun to take an economic toll. Southwest Oklahoma’s economy relies heavily on the price of oil. Oil prices have rebounded from negative territory in May 2020 but in part this occurred because of significant reductions in supply, including in the U.S. shale patch.
The pandemic has left many economic indicators far below those of one year ago. Both the number of open small businesses and hourly employment in small businesses have turned downwards after increasing early during the re-opening of the economy.
How fast and how fully the broader economy recovers depends in large part on how well federal, state, and local governments respond to the virus. The recovery also depends on the collective actions of individuals to socially distance and wear masks.
Current expectations are for an effective and widely available vaccine by the summer of 2021. Uncertainty will remain regarding how effective the vaccine would be in providing immunity for people of all ages, how long immunity would last, and the proportion of the population willing to be vaccinated.
Southwest Oklahoma’s economy may lag the country due to greater weakness in the energy economy that would occur because of a slower pace of resumption of energy demand and slower growth in other sectors dependent on national demand. For now, the virus rules everything including the economy.