Economic impact of the Oklahoma manufacturing sector.

              Fui Ting Phang
ECONOMIC IMPACT
OF THE OKLAHOMA
MANUFACTURING
SECTOR
SUMMER
2011
Southwestern Oklahoma State University
Center for Economic & Business Development
Prepared by: Fui Ting Phang
Prepared for:
The State Chamber of Oklahoma
Oklahoma Professional Economic Development Council
Oklahoma 21st Century
Special Thanks to Pelco Products, Inc., The Goodyear
Tire & Rubber Company, and Kimray Inc. for images
3 Center for Economic & Business Development at Southwestern Oklahoma State University
Executive Summary
The State Chamber of Oklahoma has approached the Center for Economic and Business Development at
Southwestern Oklahoma State University to conduct an updated study of the manufacturing sector’s economic
impact upon the State of Oklahoma. The full report is commissioned by the State Chamber of Oklahoma, Okla-homa
Professional Economic Development Council and Oklahoma 21st Century (A Research Foundation Affiliate
of the State Chamber).
The primary focus of this report is to forecast the total economic impact and implications arising from the manu-facturing
sector on Oklahoma’s economy. To analyze the economic impact, the study used the REMI model, a
dynamic input-output, multi-equation model that was specifically developed for Oklahoma and its six primary
regions. Employment data obtained from the Oklahoma Employment Security Commission (OESC) has served as
the primary input to measure this broadly-defined sector.
The economic impact of manufacturing is measured in terms of Gross Regional Product, Consumption, Real Dis-posable
Personal Income, Output, Population, Labor Force, Employment, Capital Stock, Proprietors’ Income and
Income Tax.
The study found that the economic impact of the manufacturing sector is substantial and would compound expo-nentially
into the future as it ripples through the regions and the state’s economy.
Below is a snapshot of manufacturing’s average economic impact on the statewide economy, 2011- 2031:
State Output Impact would account for $99.675 billion
Gross State Product Impact would account for $41.826 billion
Real Disposable Personal Income Impact would account for $27.077 billion
Employment Impact would account for 308,417 net new jobs
Executive Summary ................................................................................................. 3
Manufacturing at a Glance ...................................................................................... 5
Project Information:
Economic Impact Analysis Methodology .......................................................... 7
Project information & Assumptions .................................................................... 13
Statewide Economic Impact (Block 1 - Output Variables):
Gross State Product ......................................................................................... 15
Real Disposable Income ...................................................................................... 16
State Output ....................................................................................................... 17
Statewide Economic Impact (Block 2 - Labor & Capital Demand Variables):
Employment .......................................................................................................... 18
Capital Stock ..................................................................................................... 19
Statewide Economic Impact (Block 3 - Population & Labor Supply Variables):
Labor Force ...................................................................................................... 20
Population .......................................................................................................... 21
Statewide Economic Impact (Block 4 - Wages, Prices & Cost Variables):
Proprietors’ Income .......................................................................................... 22
Income Taxes .................................................................................................... 23
Conclusion .......................................................................................................... 24
Regional economic impact:
Northwest Oklahoma ....................................................................................... 25
Northeast Oklahoma ......................................................................................... 27
Southwest Oklahoma ........................................................................................ 29
Southeast Oklahoma ......................................................................................... 31
OKC MSA ........................................................................................................... 33
Tulsa MSA .......................................................................................................... 35
References .......................................................................................................... 37
Table of Contents
Center for Economic & Business Development at Southwestern Oklahoma State University 5
Manufacturing at a Glance
Manufacturing today has evolved dramatically since its earliest days, from a traditional paradigm to a much more complex taxonomy.
It is characterized by strong exports, high productivity, skilled-labor and advanced technology, innovation and growth, which has
served as the underpinning for the state’s economy in every facet.
Recent economic turmoil has challenged the nation in the past years and spreads across a wide range of industries. Since the nation
emerged from recession in late 2009, the manufacturing sector has been a key driver of the economy’s recovery. According to the Bureau
of Economic Analysis, durable-goods manufacturing and retail trade were among the leading contributors to the upturn in U.S. economic
growth in 2010.1
Manufacturing value added—a measure of an industry’s contribution to GDP—rose 5.8 percent in 2010, a sharp return to growth after
declining two consecutive years. Durable-goods manufacturing turned up, increasing 9.9 percent after declining 12.7 percent in 2009.
Nondurable-goods manufacturing rose 0.8 percent, after declining 3.4 percent in 2009.1
Growing competition and advanced tech-nology
have also yielded higher produc-tivity.
The news released by the Bureau
of Labor Statistics stated that, in 2009,
the United States had the largest pro-ductivity
increase of 7.7 percent among
the 19 countries (including Australia, Bel-gium,
Canada, U.K., Japan, Germany
and Spain to name a few).2 The observed
sharp increase in productivity portrays
a higher Gross Domestic Product (GDP)
growth rates.
According to the Bureau of Economic
Analysis, every $1 of final demand spent
for a manufactured good generates
$0.55 of GDP in the manufacturing sec-tor
and $0.45 of GSP in non-manufac-turing
sectors.4 Looking at Gross State
Product (GSP) in 2010, manufacturing
stayed strong, contributing the largest
share of14.4 percent ($17,269 million)
to Oklahoma’s total GSP, which repre-sented
an 11.1 percent increase from
2007.3 This increase was made possible
by tremendous advances in manufactur-ing
productivity. By comparison, the ‘Real
Estate, Rental and Leasing’ sector closely
followed the manufacturing sector, which
accounted for $14,284 million in GSP,
while the ‘Mining’ sector settled for third
place, which contributed $14,109 million
in terms of GSP (see graph).
Manufacturing at a Glance
0 5000 10000 15000 20000
Manufacturing
Real Estate, Rental & Leasing
Mining
Healthcare & Social Assistance
Retail
Finance & Insurance
Wholesale
Professional & Technical Services
Construction
Transportation & Warehousing
Administrative & Waste Services
Information
Utilities
Accommodation & Food Services
Other Services, except government
Management of Companies & Enterprises
Education Services
Arts, Entertainment & Recreation
Oklahoma Gross State Product by Industry 2010
(millions of current dollars)
Source: Bureau of Economic Analysis
6 Center for Economic & Business Development at Southwestern Oklahoma State University
Manufacturing at a Glance
Oklahoma manufacturing jobs had fallen by 13.9
percent in 2009 from 2007, and the state’s total es-tablishments
had slipped 1.7 percent during the same
period of time.5 Between May 2010 and May 2011,
however, employment growth in manufacturing has
outpaced other sectors with 8,700 jobs added to the
state and growing by 7.1 percent.6
Manufacturing jobs are among the highest paying in
the state. According to the National Association of
Manufacturers, manufacturing compensation is nearly
50 percent higher than other nonfarm employers in the
state.7
Situated in the heartland of the nation, Oklahoma is
among the top states for logistic centers. In the latest
statistic, Oklahoma ranked 25th in the nation of the
“Top States for Business 2011”.8 The ranking is based
Russia, $194 (6.3%)
China, $243 (7.9%)
Japan, $ 348 (11.3%)
Mexico, $424 (13.%)
Canada, $1,867 (60.7%)
Oklahoma Top Five Export Markets
2010 (millions of $)
Source: U.S. Census Bureau
on a number of factors that include the cost of business, quality of life, economy, technology and innovation, education, access to capital,
and cost of living. In addition, it was ranked 3rd in the nation in 2010, as one of the best states in terms of the “Cost of Doing Business”.8
The state is also regarded as one of the most business-friendly states, ranking 7th lowest in the nation on tax burden in 2011.9
An export boom and strong inventories have placed manufacturing at the forefront of the economic recovery. From 2009 to 2010, Okla-homa’s
exports grew 21 percent, accounting for $5.4 billion, with products shipped to over 170 countries.10 With this figure, the top five
commodities exported made up 39 percent of total exports, which is comprised of ‘Civilian Aircraft, Engines and Parts’, ‘Medical and
Surgical related Instruments and Appliances’, ‘Tires’, ‘Crude Oil’, and ‘Parts for Boring or Sinking Machinery’.11 According to the Oklahoma
Department of Commerce, exporters provide 27,000 jobs in Oklahoma.
U.S. manufacturing exports to the recent Free Trade Agreement (FTA) partners were 10.5 percent higher in 2010 when compared to our
overall export growth since each agreement was signed.12 Oklahoma’s primary export markets are Canada, Mexico, Japan, China and
Russia (see chart). Canada is the state’s largest export market, with export sales totaling $1,867 million in 2010; followed by Mexico
($424 million); Japan ($348 million); China ($243 million); and Russia ($194 million). Oklahoma was ranked 6th in the nation by volume
of exports to Russia.10 Between 2009 and 2010, Oklahoma goods exported to Russia more than doubled. According to the State Cham-ber
of Oklahoma, international trade now supports nearly one in every five American jobs, and workers in globally engaged companies
earn more than the average wage.13
Understanding the value and the potential economic impact of this diverse sector is essential as we move towards the economic recovery.
Positive spillover of manufacturing will benefit the state’s economy in many ways.
Center for Economic & Business Development at Southwestern Oklahoma State University 7
Economic Impact Analysis Methodology
Regional Economic Models, Inc. (REMI),
based in Amherst, MA, produces
economic modeling software that enables
users to answer “what if questions”
about their respective economies. Each
REMI model is tailored for specific
geographic regions by using data,
including employment, demographic, and
industry data, unique to the modeled
region. The Center for Economic &
Business Development uses the Oklahoma
REMI model, which is a six region, 70
sector REMI model, to forecast how a
given economic activity or policy change
occurring in one region would affect that
region, a group of regions, and/or the
state.
The REMI simulation model uses hundreds
of equations and thousands of variables
to forecast the impact that an economic/
policy change would have upon an
economy. Basically, the REMI model
measures this economic impact by first
forecasting the region’s performance
as if there were not any changes (the
control forecast), and then forecasting
the region’s/state’s performance if
the economic activity occurred (the
alternative forecast). The difference
between the two forecasts represents the
economic impact of the economic activity
upon the region, group of regions, and/
or the state. It is this economic impact
that will be reported in the Economic
Impact Analysis section of this report. A
basic graphic representation of some of
the linkages in the economic modeling
software is presented below.
As can be seen, the REMI model contains
five “blocks”. Each block has its own
variables and interactions so that
changing any one variable in the model
not only affects other variables in its
Economic Impact Analysis Methodology
Net Exports
State & Local Government Spending
Real Disposable Income
Output
Employment Opportunity Wage Rate
Housing Price Real Wage Rate
Composite Wage Rate Production Costs
Composite Prices
[4] Wages, Prices, and Production Costs
[1] Output
[3] Demographic [2] Labor & Capital [5] Market Share
Demand
Consumption Spending
Domestic
Market
Share
Optimal
Capital Stock
Participation
Rate
Labor Force
Employment
Migration Population
Labor / Output
Ratio
International
Market
Share
Investment Spending
REMI Linkages (Excluding Economic Geography Linkages)
8 Center for Economic & Business Development at Southwestern Oklahoma State University
Economic Impact Analysis Methodology
own block, but also variables in other
blocks. For example, if XYZ Corporation
expanded its operations in Oklahoma
City by hiring an additional 100 new
employees, then that initial employment
increase would ultimately affect output,
population, migration, wage rates, etc.
It is through the model’s linkages and
interactions that employment’s (in Block 2)
direct effects upon optimal capital stock
(Block 2), employment opportunity (Block
4), and real disposable income (Block 1),
that the employment gain works its way
through the model to affect each of the
other variables.
Commenting first on employment’s
positive effect upon optimal capital
stock, this variable will increase from an
employment gain because (1) some new
employees will demand newly constructed
houses, and (2) physical capital will be
required to assist the labor to produce
output. Optimal capital stock interacts
with actual capital stock (not shown) to
affect the level of investment (Block 1)
in the model which ultimately increases
Oklahoma City’s output (Block 1). Higher
optimal capital stock when compared to
actual capital stock spurs investment in
the region since the difference represents
unfulfilled demand for physical capital.
And output (Y) increases since it is equal
to the sum of personal consumption (C),
state & local government spending (G),
investment (I), net exports from the region
(X-M) as well as demand for intermediate
inputs.
Commenting next upon employment’s
effect upon employment opportunity, this
variable increases because 100 new jobs
have been created in the economy. An
increased employment opportunity will
positively affect wage rates (Block 4) if
the region’s employment is growing faster
than the region’s labor force (Block 3).
Wage rates interact with the consumer
price deflator, which is an adjustment
factor accounting for differing inflation
rates in various regions, to affect real
wage rates (Block 4). Higher real wage
rates in one region compared to another
region serve as an incentive for people to
move between geographic regions; thus
real wage rates affect migration (Block
3).
Commenting last upon employment’s
effect upon real disposable income (Block
1), as jobs are created, income paid to
the new employees also increases. The
newly employed will save a portion of
their income and spend a portion of their
income on consumer goods, the latter of
which increases consumption (Block 1). As
a component of output, increased personal
consumption produces a subsequent rise in
output.
Obviously, the previous example is only
a simple illustration of a more complex
model. For more information about the
REMI model and its equations, please
read Regional Economic Modeling
by George Treyz (Kluwer Academic
Publishers, 1993.) 14
Center for Economic & Business Development at Southwestern Oklahoma State University 9
Economic Impact Analysis Methodology
Given the previous basic illustration
of the REMI model, the process
that the REMI model uses to forecast
the economic impact of a policy change
can be illustrated. The process begins
with a policy question and concludes
with a comparison between a control
forecast and an alternative forecast. The
accompanying diagram assists with the
illustration.
A control forecast, which uses current data
regarding the economy, is generated by
the REMI model. The control forecast
represents the projection of the economy
into the future ceteris paribus. This means
that future economic growth will follow
similar patterns in the future as had been
experienced in the past.
The alternative forecast allows the user to
input variable changes to occur in future
time periods. Only those variables that
would be affected by the policy change
being measured would be changed in
the alternative forecast. The REMI model
then forecasts economic performance
based upon the policy variable changes.
The difference between the alternative
and the control forecasts, measured by
the distance between the two forecast
lines, represents the economic impact
of the policy change upon the economy.
If the alternative forecast is greater
than the control forecast, then a positive
economic impact results for the economy.
A negative economic impact results should
the alternative forecast be less than the
control forecast.
REMI Model
1,975
1,769
Year 1 Year 2 Year 3 Year 4
1,975
1,769
Year 1 Year 2 Year 3 Year 4
1,975
1,769
Year 1 Year 2 Year 3 Year 4
Policy Question
External Input
Alternative Forecast Control Forecast
External Input
Forecasting Economic Impacts with the REMI Software
“What would be t he e conomic
impact upon O klahoma from t he
expansion of ABC Corporation in the
Tire Manufacturing industry?”
Increased e mployment / output
variables i n the Tire M anufacturing
industry and baseline values f or a ll
other external policy variables.
Baseline value for external p olicy
variables.
“What would be the economic im-pact
upon Oklahoma from the ex-pansion
of ABC Corporation in the
Tire Manufacturing industry?”
Increased employment / output
variables in the Tire Manufacturing
industry and baseline values for all
other external policy variables.
Baseline value for external policy
variables.
10 Center for Economic & Business Development at Southwestern Oklahoma State University
Economic Impact Analysis Methodology
As is observable from the
accompanying map, the state of
Oklahoma is divided into six regions in
the REMI model used by the CEBD. They
are: Northwest Oklahoma, Northeast
Oklahoma, Southwest Oklahoma,
Southeast Oklahoma, the Oklahoma
City metro area, and the Tulsa metro
area. The Oklahoma City metro area
and the Tulsa metro area correspond to
the Metropolitan Statistical Areas (MSAs)
defined by the Office of Management &
Budget.
The Office of Management & Budget
(OMB) defines metropolitan areas in the
United States based upon the size of
the economies and commuting patterns.
The two largest MSAs by population in
Oklahoma are Oklahoma City MSA and
Tulsa MSA. As defined by the OMB, the
Oklahoma City MSA is comprised of
seven counties (Canadian, Cleveland,
Grady, Lincoln, Logan, McClain, and
Oklahoma counties), and the Tulsa MSA
is comprised of seven counties (Creek,
Okmulgee, Osage, Pawnee, Rogers, Tulsa,
and Wagoner counties).15
Additionally, any of the regions may be
combined with any combination of the
other regions to produce a user-defined
region for the purposes of measuring
economic impact. For example, if an
economic impact were to be quantified
for Eastern Oklahoma, then the three
regions of Northeast Oklahoma,
Southeast Oklahoma and the Tulsa metro
area would be combined to be reported
as Eastern Oklahoma.
This report delineates the economic
impact of the Oklahoma Manufacturing
sector on the state of Oklahoma and the
six sub-state regions (see map below) of
Oklahoma.
Oklahoma REMI Regions
Northwest Oklahoma
Northeast Oklahoma
Southwest Oklahoma
Southeast Oklahoma
OKC MSA
Tulsa MSA
Center for Economic & Business Development at Southwestern Oklahoma State University 11
Economic Impact Analysis Methodology
It is important to note that while economic
impact analysis is a valuable tool for
economic development, economic impact
analysis does have limitations. Resource
Systems Group, Inc. identified some of
the limitations of their economic impact
analysis tool. Those limiting factors
that pertain to REMI-modeled economic
impact analysis are:
• Economic impact analysis cannot
determine whether a new economic
activity/project is economically feasible
or profitable. It is possible that projects
with very large favorable economic
impact may be unprofitable.16
• Economic impact analysis
cannot identify the specific individuals
or the location of individuals or businesses
impacted. For example, the analysis may
show that a specific number of jobs will
be generated in the trucking industry, but
it cannot determine if those jobs will be
filled from a specific town.16
• Economic impact analysis
cannot determine whether the outcomes
of an economic activity are socially or
environmentally beneficial.
Regarding the first point, the purpose
of economic impact analysis is not to
determine whether a new economic impact
activity is profitable. Rather, the purpose
of economic impact analysis is to quantify
the impact of the new economic activity
upon an economy. Other assessment
tools, like market feasibility studies or
cost/benefit analyses, can help decision-makers
determine whether an economic
activity/project is profitable.
Regarding the second point, although the
economic impact cannot identify a specific
company or city, the REMI model can
forecast the region in which the economic
impact will occur. With the state divided
into six regions, the level of detail is
greater in the REMI model than with other
economic impact analysis models.
Regarding the final point, Resource
Systems Group, Inc. reported that
economic impact analysis “can only deal
with impact that is easily quantifiable in
dollars or employment. Environmental,
health, or social impacts are not normally
assessed, even though they may have
economic implications.”16 While this may
be a limitation of IMPLAN-modeled
economic impact analysis, this is not a
limitation with REMI-modeled economic
impact analysis. Admittedly these
externalities are not easily quantifiable,
but they may still be quantified through
the use of well-formed surveys. With
a quantifiable amount associated with
the externality, its impact may then be
modeled through an additional simulation.
There is at least one other limitation when
measuring the economic impact upon a
region not mentioned in the Resource
Systems Group, Inc. report. That limitation
relates to using aggregated industry
data to measure economic impact. Most
economic impact tools use historical data
to model future events. Some of the
historical data is aggregated in order to
make the modeling tool more affordable
and user-friendly. Using aggregate
industry data to model the economic
impact of a specific company requires the
assumption that the specific company is
a good sample of the aggregate of the
whole industry.
Lastly, it should be noted that economic
impact analysis is not the same tool as
a cost-benefit analysis. A cost-benefit
analysis quantifies all of the costs, including
social and environmental costs, and all of
the benefits associated with a project, and
if the ratio of benefits to costs is greater
than 1.0, then this becomes the basis for
approving a project. Economic impact
analysis does not have any threshold
associated with the tool. Rather, the
REMI-modeled economic impact analysis
will forecast quantifiable amounts of
employment, population, income, etc. over
a range of years for any region. These
quantifiable forecasts can then be used
with other tools, including cost-benefit
analyses and feasibility reports to assist
in the decision-making process.
12 Center for Economic & Business Development at Southwestern Oklahoma State University
Economic Impact Analysis Methodology
Separate from the limitations of
economic impact analysis, there are
unique limitations to the REMI model.
Every economic impact model attempts to
simulate real world conditions, and every
economic impact model has its own unique
weaknesses. The primary weakness of our
REMI model is that the geographic regions
in the model cannot be disaggregated
further. This means that our version of the
REMI model cannot forecast the economic
impact upon smaller regions. Specifically,
the six regions cannot be broken into
the counties comprising their respective
region. The reader should bear in mind
that every model has its weaknesses, and
while it is not the purpose of this report to
list the relative strengths and weaknesses
of each of the economic impact models,
we want to be as transparent as possible
regarding the REMI modeling software
used by the CEBD.
One of the key features differentiating
the REMI simulation model from other
economic impact measurement tools is
the fact that REMI uses several economic
impact methodologies to predict impact
upon an economy. Whereas other tools
rely upon one methodology to predict
economic impact, REMI combines several
economic impact methodologies, which has
the effect of minimizing the weaknesses
of any one methodology. Methodologies
included in the REMI model are input-output,
econometric equations, economic-base,
and it also includes aspects of
computable general equilibrium.
An additional strength of the REMI model
involves its dynamic nature. Whereas
economic impact models relying solely on
input-output are only able to make static
one year forecasts, the REMI model is
able to forecast the economic impact over
a number of years.
Also differentiating the REMI model from
other economic impact models is its ability
to report the economic impact with a
myriad of economic and/or demographic
variables. This means that not only will
traditional economic impact variables
(for example, employment, income, gross
regional product, etc.) be reported
by the REMI model, but the model is
also able to report other economic and
socioeconomic variables (for example,
capital stock, economic migrants,
population by age/gender, etc.) as well.
By forecasting nontraditional economic
and socioeconomic variables, the REMI
model provides a more complete picture
of the impact a given scenario would
have upon an economy.
Center for Economic & Business Development at Southwestern Oklahoma State University 13
Project Information and Assumptions
Project Information and Assumptions
This section documents key scenarios
and assumptions that serve as primary
inputs into the REMI model for the purposes
of estimating incremental impact of
Manufacturing on Gross Regional Product
(GRP), Output, Employment, Income, Taxes
and more.
The REMI model is a dynamic input-output
modeling software that generates
forecasts based on historical data. The
primary national, state, and county data
came from the Bureau of Economic Analysis
(BEA). Other major sources of historical
data were obtained from the U.S. Census
Bureau, Bureau of Labor Statistics (BLS),
State Employment Security Agencies
(ESAs), Energy Information Administration
and other related sources that serve as the
foundation upon which to forecast future
economic and socioeconomic variables.
In order to model the economic impact
of a business that presently exists in the
economy, it is necessary to remove data
associated with that business from the
modeling software in the current year
and the projected future years. As a
result, the subsequent forecast produces
negative impact when compared to the
control forecast. This approach is known
as a “Counterfactual Modeling”. In order
to explain the positive impact that the
business would have upon the economy,
the results obtained were multiplied by
negative one, which later refers to as a
“counterfactual positive” simulation. This
type of simulation assumes any dollars/
jobs removed from the model will not be
re-spent or re-employed elsewhere in the
economy.
Employment data used as inputs into
the REMI model were supplied by
the Oklahoma Employment Security
Commission (OESC). The employment
data we obtained and used to run the
simulation are reported in 3-digit NAICS
codes. Due to the recent changes made to
the REMI model, employment input of the
‘Transportation Equipment Manufacturing’
industry was further disaggregated into
2 sub-categories of 4-digit NAICS codes,
which are ‘Motor Vehicle, Vehicle Body
and Parts Manufacturing’ and ‘Other
Transportation Equipment’. (See Table
1.1)
The employment numbers of
manufacturing included workers covered
by the State Unemployment Insurance (UI)
laws and federal civilian workers covered
by the Unemployment Compensation for
the Federal Employees (UCFE) program.
The total manufacturing employment of
130,001 represents the total job count
of federal, local and private non-farm
employment. This number was grouped
by six sub-state regions: with 5,811
jobs in the Northwest region; 18,831
jobs in the Northeast region; 7,351 jobs
in the Southwest region; 18,473 jobs
in the Southeast region; 32,750 jobs
in Oklahoma City MSA; and 46,785
jobs in Tulsa MSA. Total manufacturing
employment in 2009 declined by 13.9
percent compared to total manufacturing
NAICS Category
311
312
313
314
315
316
321
322
323
324
325
326
327
331
332
333
334
335
3361-3363
3364-3369
337
339
Food Manufacturing
Beverage and Tobacco Product Manufacturing
Textile Mills Manufacturing
Textile Product Mills Manufacturing
Apparel Manufacturing
Leather and Allied Product Manufacturing
Wood Manufacturing
Paper Manufacturing
Printing and Related Support Activities Manufacturing
Petroleum and Coal Product Manufacturing
Chemical Manufacturing
Plastics and Rubber Product Manufacturing
Nonmetallic Mineral Product Manufacturing
Primary Metal Manufacturing
Fabricated Metal Product Manufacturing
Machinery Manufacturing
Computer and Electronic Product Manufacturing
Electrical Equip’t, Appliance & Component Product Manufacturing
Motor Vechicle, Vehicle Body and Parts Manufacturing
Other Transportation Equipment Manufacturing
Furniture and Related Product Manufacturing
Miscellaneous
Total
Employment
16,143
2,776
187
649
968
267
2,294
2,717
3,262
2,540
2,742
9,782
7,765
3,936
20,845
26,254
6,079
3,118
6,021
6,021
1,660
3,975
130,001
Table 1.1
14 Center for Economic & Business Development at Southwestern Oklahoma State University
Project Information and Assumptions
employment in 2007 in the previous study.
The data obtained from OESC was
grouped by FIPS codes. FIPS codes refer
to the Federal Information Processing
Standards Codes. It is created for states
and counties to name populated places.
For special cases, unique FIPS codes such
as FIPS 995 and FIPS 998 are assigned
to specific businesses. FIPS 995 is defined
as statewide, locations in more than one
county, or no primary county. To explain
this, it refers to establishments that have
locations in more than one county, or for
which a primary location has not been
determined or cannot be assigned by
the State. FIPS 998, on the other hand,
is defined as out-of-state locations.
Generally, employers reported under
FIPS 998 must have UI accounts in all
states in which they have permanent
worksites or in which they have ongoing
business operations, such as construction,
which usually lack a fixed worksite. While
most out-of-state worksites will be of a
temporary nature, there are a few rare
cases where an employer may maintain
a worksite outside the state in which UI
coverage is based that could be classified
with county code 998.
The study included FIPS 995 employment
as data inputs into the REMI model, but
not the employment data reported in
FIPS 998, since the economic activities
in FIPS 998 occurred in out-of-state
regions. The study further assumed that
employment numbers of FIPS 995 were
proportionately distributed to the six
distinct regions of Oklahoma. (See map
on pg 7)
To forecast the possible economic impact,
the study employed a more conservative
approach, assuming the number of total
employment inputs remains unchanged
over the entire forecasted time period. Two
variables, ‘Sales Employment’ and ‘State
and Local Government Employment’,
were used to project the economic
impact driven by the manufacturing
sector. Using the employment data,
seven complementary scenarios (OKC
MSA, Tulsa MSA, Northwest Oklahoma,
Northeast Oklahoma, Southwest
Oklahoma, Southeast Oklahoma and
FIPS 995) were built and modeled as
“counterfactual positive” simulations,
based on a forecast time frame from
2011 to 2031.
As previously mentioned, the REMI model
relies on historical data to forecast the
economic impact. This data was obtained
from different sources and each of these
sources use different measurements
to report the monetary figures. BEA
has reported Gross Domestic Product
(GDP) and its aggregate final demand
components in chained real dollars, while
BLS uses fixed real dollars for data that
are at the most ‘detailed’ level. In order
to reconcile these two sets of variables, all
real dollar concepts used in the model are
based on fixed weights. This allows the
industry value added and final demand
totals to remain balanced.
To avoid any confusion, all monetary
figures of the economic impact reported
are present in ‘current’ dollars. Current
dollar is the value of a dollar at the time
at which it is measured.
Looking at the body in this report, the
former half of the report discusses the
possible economic impact of manufacturing
on the state’s economy, and the latter half
addresses the same issues, but focuses
on a regional level on the six sub-state
regions. The graphs shown from page 14
to page 22 represent the aggregated
economic impact (direct, indirect, and
induced impact) of the manufacturing
sector on Oklahoma’s economy.
The control forecast predicts the economic
and demographic variables into the
future, if nothing changes (ceteris paribus)
in the economy. The alternative forecast
predicts the same variables for the
economy with a given economic stimulus,
which in this case are the manufacturing
employment data inputs. The difference
between the two (control forecast and
alternative forecast) concludes the
economic impact that the stimulus has upon
the state and the regional economies.
The aggregated economic impact is an
estimate of what would have occurred
in the study region over the study time
period, if manufacturing had been the
only stimulus that occurred in the economy
and ceteris paribus.
The economic impact of the manufacturing
sector, hereafter is referred to as
“Manufacturing”.
Center for Economic & Business Development at Southwestern Oklahoma State University 15
Statewide Economic Impact (Block 1: Output Variable)
Gross State Product
Gross State Product (GSP) is analo-gous
to the nation’s Gross Domes-tic
Product (GDP), and to the region’s
Gross Regional Product (GRP). It is the
total value of all goods and services pro-duced
within a region during a given time
period. In general, it can be used as a
barometer to gauge a region’s economic
well being.
GSP is predicted to account for $146.305
billion if nothing changes in the state’s
economy in 2011. With the addition of
Manufacturing, this amount would grow to
as much as $171.170 billion, represent-ing
a 17 percent increase or $24.865
billion of GSP impact. By 2031, the GSP
impact is predicted to equate $65.402
billion, which would result in an upsurge
of total GSP to reach to an estimate of
$412.181 billion.
Over the years, average Manufactur-ing
GSP impact is projected to match
$41.826 billion annually, mirroring a
17.9 percent increment from the baseline.
Manufacturing activities would stimulate
GSP impact to grow by roughly 5 percent
yearly, on average, throughout the study
time period.
Looking at Manufacturing impact across
all industries, the ‘Other Services’ cat-egory
would make up 17.8 percent
($3,738.331 million) of the average to-tal
consumption impact, while the ‘Fuel
Oil and Coal’ category would account for
0.03 percent or $7.225 million of the av-erage
total consumption impact.
Gross State Product
(GSP) As a value added
concept is analogous to
the national concept of
Gross Domestic Product.
It is equal to output ex-cluding
the intermediate
inputs. It represents com-pensation
and profits. Af-fected
By: Consumption,
Net Exports, Investment,
State & Local Govern-ment
Spending Affecting:
Commodity Access In-dex,
Change in Local Sup-ply,
Employment, Output
$0
$100
$200
$300
$400
$500
Without Manufacturing
Economic Impact
With Manufacturing
2011 2016 2021 2026 2031 Average
(Billions of Current $)
$24.865 $31.267 $40.227
$230.406
$270.633
$50.831
$276.563
$327.394
$65.402
$346.779
$412.181
$41.826
$234.237
$276.063
$184.494
$215.761
$146.305
$171.170
Graph 1.1: Economic Impact of Gross State Product
Millions of Current $
$983.593
$1,950.226
$706.295
$2,298.690
$818.649
$606.736
$7.225
$1,868.008
$2,660.550
$1,183.201
$575.205
$3,660.313
$3,738.331
Category
Average Manufacturing Consumption Impact
Vehicles & Parts
Computers & Furniture
Other Durables
Food & Beverages
Clothing & Shoes
Gasoline & Oil
Fuel Oil & Coal
Other Non-Durables
Housing
Household Operation
Transportation
Medical Care
Other Services
Total $21,057.022
16 Center for Economic & Business Development at Southwestern Oklahoma State University
Statewide Economic Impact (Block 1: Output Variable)
Real Disposable Personal Income
Real Disposable Personal Income rep-resents
the after tax, inflation adjust-ed
income that can be spent or saved by
income earners. Real Disposable Personal
Income is directly affected by Disposable
Personal Income, so a change in Real Dis-posable
Personal Income will lead to a
change in Personal Consumption.
In REMI’s term, Real Disposable Personal
Income equals Disposable Personal In-come
deflated by the PCE-Price Index.
Briefly, an increase in real disposable
personal income can be caused by an in-crease
in disposable personal income or
a decrease in the PCE-Price index.
Manufacturing’s Real Disposable Personal
Income impact is projected to surge con-siderably
and would leap 178.5 percent
from $15.439 billion in 2011 to $42.999
billion in 2031. By 2031, total Real Dis-posable
Personal Income above the
baseline would build up to an estimated
$362.613 billion.
Compared to the previous study from
2008, the predicted average impact
that Manufacturing would have on Real
Disposable Personal Income would have
contracted 17.5 percent, down from the
initial estimates of $32.834 billion to
$27.077 billion. Despite this, Manufac-turing
continues to generate substantial
impact on the statewide Real Disposable
Personal Income.
Mirroring the Manufacturing in the econ-omy,
the economic impact on Real Dispos-able
Personal Income is projected to grow
by an average rate of 5.3 percent annu-ally.
Average impact on Real Disposable
Personal Income is predicted to rise to
$27.077 billion per year throughout the
entire forecasted time period.
Real Disposable Personal
Income: Disposable per-sonal
income deflated by
the PCE-Price Index (the
personal consumption
expenditure price index).
Affected By: Employ-ment
(Block 2), Com-muter
Income or Out-flow,
Property Income
Transfers, Taxes, So-cial
Security Payments,
Compensation (Block 4),
Consumer Prices (Block
4) Affecting: Consump-tion,
Optimal Residential
Capital Stock (Block 2)
$0
$50
$100
$150
$200
$250
$300
$350
$400
Without Manufacturing
Economic Impact
With Manufacturing
2011 2016 2021 2026 2031 Average
(Billions of Current $)
$15.439 $20.075 $25.993
$205.909
$231.902
$33.180
$253.585
$286.765
$42.999
$319.614
$362.613
$27.077
$211.044
$238.121
$162.143
$182.218
$128.321
$143.760
Graph 1.2: Economic Impact of Real Disposable Personal Income
Center for Economic & Business Development at Southwestern Oklahoma State University 17
Statewide Economic Impact (Block 1: Output Variable)
State Output
State output, reflecting broader eco-nomic
activities that include the amount
of production, is comprised of all the in-termediate
goods purchased as well as
value-added (compensation and profit).
Briefly, it is the sum of Gross State Prod-uct
plus intermediate goods and services.
Output is affected by changes in indus-try
demand in all regions in the nation,
the home region’s share of each market,
and international exports from the region.
Variables affecting and affected by the
state output are the same variables af-fecting
and affected by GSP, except that
state output includes the measurement of
intermediate inputs.
In 2011, state output is anticipated to
be $267.565 billion, if nothing changes
in the economy. This amount would surge
to $326.615 billion if Manufacturing is
brought into the state, which would render
an estimated of $59.050 billion in state
output impact that is driven by Manufac-turing’s
activities.
State output impact will continue to grow
in the subsequent years at an average
speed of 5 percent annually, and the av-erage
output impact is projected to be
$99.675 billion per year. Over the years
of the forecasted time frame, the aggre-gated
impact on state output would ac-count
for approximately $2,093.168 bil-lion.
REMI predicts the state output (without
Manufacturing) to be $419.368 billion
and $627.302 billion, in 2021 and 2031
respectively. However, if Manufactur-ing
were to be added to the economy,
this impact would appreciate to nearly
$515.403 billion and $782.274 billion
respectively, portraying a 22.9 percent
increment in 2021 and 24.7 percent in-crease
in output impact by 2031.
State Output The amount
of production in dollars,
including all intermediate
goods purchased as well as
value-added (compensa-tion
and profit). Can also be
thought of as sales (Output=
Self-Supply + Export + In-traregional
Trade + Exog-enous
Production. Affected
By: Consumption, Interna-tional
Exports, Investment,
State and Local Government
Spending, Intermediate In-puts,
Share of Domestic Mar-kets
Affecting: Commod-ity
Access Index, Change
in Local Supply, Employ-ment,
Intermediate Inputs
$0
$100
$200
$300
$400
$500
$600
$700
$800
Without Manufacturing
Economic Impact
With Manufacturing
2011 2016 2021 2026 2031 Average
(Billions of Current $)
$59.050 $74.810 $96.035
$419.368
$515.403
$121.198
$502.163
$623.361
$154.972
$627.302
$782.274
$99.675
$426.351
$526.026
$338.062
$412.872
$267.565
$326.615
Graph 1.3: Economic Impact of State Output
18 Center for Economic & Business Development at Southwestern Oklahoma State University
Statewide Economic Impact (Block 2: Labor and Capital Demand Variables)
Employment
Employment includes the number of full-time
and part-time jobs by place of
work, with full-time and part-time jobs
carrying equal weight in the REMI model.
While employees, sole proprietors, and
active partners are included in the esti-mate,
unpaid family workers and volun-teers
are not included.
Manufacturing has an employment mul-tiplier
of 2.4 on the statewide economy.
Generally speaking, with every 100 jobs
created by Manufacturing, statewide
employment would increase by an addi-tional
240 jobs. The calculation of the em-ployment
multiplier is done by taking the
number of projected average employ-ment
impact (308,417 jobs) divided by
the number of manufacturing employment
input (130,001 jobs).
As noted in the graph, the existence of
Manufacturing in the economy would
drive the statewide employment to in-crease
to 2,465.527 thousand jobs from
the initial 2,166.238 thousand jobs in
2011. By 2031, the employment impact
is projected to total 2,750.785 thousand
jobs, which indicates a 13.7 percent in-crease,
or an additional 328,540 net new
jobs added to the state.
On average, the statewide employment
impact is estimated to increase 308,417
net new jobs per year. Of this figure, the
estimated private non-farm employment
impact would stand at 85 percent. Manu-facturing
would account for the largest
impact, supporting nearly 129,347 of
statewide employment.
Employment: Bureau
of Economic Analysis
(BEA) concept based
on place of work; in-cludes
full-time and
part-time employees.
Affected By: Labor /
Output Ratio, Output
(Block 1), Labor Pro-ductivity
Affecting:
Capital Stock, Real
Disposable Income
(Block 1), Employment
Opportunity (Block 4),
Wage Rate (Block 4)
Category Net New Job
Average Employment Impact
Natural Resources, Mining,
Utilities, Construction
22,215
129,347
31,034
3,489
76,196
46,137
Manufacturing
Trade
Transportation,
Information, Finance, &
Accounting
Services
State & Local Government
Graph 2.1: Economic Impact of Employment
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000 Without Manufacturing
Economic Impact
With Manufacturing
2011 2031 Average
299,289 328,540
2,422,245
2,750,785 2,622,158
2,313,741
308,417
2,166,238
2,465,527
(People)
Center for Economic & Business Development at Southwestern Oklahoma State University 19
Statewide Economic Impact (Block 2: Labor and Capital Demand Variables)
Capital Stock
As noted before, Capital Stock is di-vided
into three major categories.
These include Residential Capital Stock,
Non-Residential Capital Stock and Utility
Capital Stock. Each of these categories is
further disaggregated into actual or opti-mal
capital stock. However, recent chang-es
have omitted the reporting of Utility
Capital Stock, therefore, this report will
focus on the findings of Residential Actual
Capital Stock and Non-Residential Actual
Capital Stock. As a reminder, all reported
Actual Capital Stock is the cumulative im-pact
that would occur in the state, which is
triggered by the jobs supported in Manu-facturing.
In 2011, the state’s total Actual Capital
Stock is forecasted to grow by an addi-tional
$5.823 billion. This amount would
ramp up to as much as $80.837 billion
by 2031. The average impact brought
about by Manufacturing would equate to
$39.907 billion per year.
Oklahoma Residential Actual Capital
Stock is the amount of residential capi-tal
(housing structures) in the region ac-cumulated
over time net of depreciation.
Oklahoma Residential Actual Capital
Stock is affected by changes in residen-tial
investment. The economic impact upon
the statewide Residential Actual Capital
Stock is predicted to grow from $3.941
billion in 2011 to $60.130 billion in
2031, resulting in an average impact of
$28.972 billion annually.
Oklahoma Non-Residential Actual Capi-tal
Stock is the amount of non-residential
capital (non-housing structures) in the re-gion
accumulated over time net of de-preciation.
In 2011, the statewide Non-
Residential Actual Capital Stock impact
is forecasted to be $1.882 billion and
would eventually increase to $20.707
billion by 2031. The average impact
spillover on the statewide economy would
equal $10.935 billion per year.
Capital Stock The
amount of capital
stock existing in the
economy. It is further
divided into Residen-tial
Actual Capital
Stock and Non-Resi-dential
Actual Capital
Stock Affected By:
Cummulative effects
of Investment Affect-ing:
Gap betwen Ac-tual
& Optimal Capi-tal
Stock, Investment
$0
$100
$200
$300
$400
$500
$600
$700
$800
Without Manufacturing
With Manufacturing
Total Capital Stock Impact
2011 2031 Average
0
10
20
30
40
50
60
70
80
Residential Actual Capital Stock Impact
Non-Residential Actual Capital Stock Impact
(Billions of Current $)
$5.823 $80.837
$688.070
$768.907 $455.328
$415.421
$39.907
$214.836
$220.659
Graph 2.2: Economic Impact of Capital Stock
20 Center for Economic & Business Development at Southwestern Oklahoma State University
Statewide Economic Impact (Block 3: Population and Labor Supply Variables)
Labor Force
Labor force includes the total number of
people employed and those who seek
employment in a given region, calculated
with the participation rates and age co-hort.
Calculation of the labor force is derived
by taking the total population multiplied
by the participation rate. An increase in
population or participation rate will result
in an increased labor force in the region,
and vice versa.
As can be seen in the graph, the labor
force is predicted to total 1,833.830
thousand people in 2011, if nothing
changes economically. This figure is pro-jected
to escalate to 1,975.783 thousand
people if Manufacturing’s activities were
injected into the region, suggesting an in-crease
of 7.7 percent or 141,953 people
in terms of the labor force impact.
By the end of 2031, the economic im-pact
of Manufacturing on labor force is
estimated to add an additional 282,532
people onto the baseline projection of
1,992.313 thousand people.
The average impact on the labor force
would grow by 238,698 people per
year. With this number, the White popu-lation
has the largest share (73.3 percent
or 174,978 people) of the average la-bor
force impact; followed by the ‘Others’
population (12.5 percent or 29,767 peo-ple);
the Hispanic population (7.5 per-cent
or 18,110 people); and lastly, the
Black population (6.6 percent or 15,843
people).
Labor Force: The
number of people in
the labor force, i.e.,
employed or seeking
work; calculated with
participation rates
by age-gender-racial
cohort. Affected By:
Population and Par-ticipation
Rate Affect-ing:
Employment Op-portunity
(Block 4),
Wage Rate (Block 4)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000 Without Manufacturing
Economic Impact
With Manufacturing
2011 2031 Average
141,953 282,532
1,992,313
2,274,845 2,162,075
1,923,377
238,698
1,833,830
1,975,783
Graph 3.1: Economic Impact of Labor Force
(People)
Center for Economic & Business Development at Southwestern Oklahoma State University 21
Statewide Economic Impact (Block 3: Population and Labor Supply Variables)
Population
Population reflects the mid-year es-timates
of people, including births,
special populations, survivors from the
previous year, economic migrants, inter-national
migrants, and retired migrants. It
is affected by changes in total migration,
special populations, natality and survival
rates.
Population appears not only as a determi-nant
of Real Disposable Personal Income
Per Capita, but also as a determinant of
Consumption, State and Local Govern-ment
Spending, and the Relative Housing
or Land Prices. A change in Population will
result in a change of these variables.
The major determinant of Population it-self
is Economic Migration. Economic mi-grants
are migrants under age 65 (who
were part of the civilian population the
preceding year) who respond to econom-ic
and amenity factors. Increased amenity
factors translate into a higher economic
migrant impact with more people moving
into the region. A positive economic mi-gration
becomes indicative of the grow-ing
population impact. It should be noted
that economic migrants present in the
graph are non-cumulative impact. As can
be seen, the number of economic migrants
would eventually taper off over time as
the stimulus (Manufacturing) approaches
the end of the forecast time period, and
more economic migrants are anticipated
to leave the state.
From 2011 to 2031, Manufacturing’s im-pact
on population is predicted to esca-late
from 176,277 people to 552,629
people. Oklahoma’s net economic migrant
impact is estimated to increase to 14,687
people per year on average, accounting
for 3.5 percent of the average popula-tion
impact (421,275 people).
Population Mid-year es-timates
of population, in-cluding
survivors from
the previous years, births,
special populations, and
three types of migrants
(economic, international,
and retired). Affected By:
Total Migration, Special
Population, Natality Rates,
and Survival Rates Af-fecting:
Potential Labor
Force, Labor force, Local
/ state Government Spend-ing
(Block 1), Consump-tion
Spending (Block 1),
Housing Price (Block 4)
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
With Manufacturing
Population Impact
Without Manufacturing
2011 2031 Average
0
10
20
30
40
50
Net Economic Migrant Impact
176,277 552,629
4,410,259
4,962,888 4,607,861
4,186,586
421,275
3,854,513
4,030,790
Graph 3.2: Economic Impact of Population
22 Center for Economic & Business Development at Southwestern Oklahoma State University
Statewide Economic Impact (Block 4: Wage, Price and Cost Variables)
Proprietors’ Income (with Inventory & Capital Adjustment)
Proprietors’ Income with Inventory and
Capital Consumption Adjustments is
the current production income of sole pro-prietorships,
partnership, and tax-exempt
cooperatives. Corporate directors’ fees
are included in proprietors’ income, but
the imputed net rental income of owner
occupants of all dwellings is included in
the rental income of persons.
Proprietors’ income excludes dividends
and monetary interest received by non-financial
business and rental incomes re-ceived
by persons not primarily engaged
in the real estate business; these incomes
include dividends, net interest, and rental
income of persons, respectively.
As noted in the graph, if nothing changes
in the economy, the predicted proprietors’
income would be $16.249 billion in 2011.
With the stimulation of Manufacturing’s
economic activities on the statewide econ-omy,
the proprietors’ incomes are predict-ed
to spiral upward to $21.068 billion,
resulting in a proprietors’ income impact
of $4.819 billion.
By 2031, 24.3 percent or $8.886 billion
worth of proprietors’ income impact is
projected to be added to the state, which
brings the total proprietors’ income to
equate $45.435 billion.
Over the years, the average annual im-pact
on proprietors’ income is expected
to increase approximately $6.387 billion
annually, growing at an average annual
rate of 3.1 percent.
Proprietors’ Income It is
a BEA (Bureau of Eco-nomic
Analysis) concept,
including income in kind
of sole-proprietorships,
partnership, and tax-ex-empt
cooperatives, ex-cludes
dividends, mon-etary
interest received
by nonfinancial busi-ness,
and rental income
received by persons not
primarily engaged in the
real estate business. Af-fected
By: Wage Rate,
Prices, Costs Affect-
$0
$10
$20
$30
$40
$50
Without Manufacturing
Economic Impact
With Manufacturing
2011 2016 2021 2026 2031 Average
(Billions of Current $)
$4.819 $5.292 $6.147
$24.371
$30.518
$7.278
$28.944
$36.222
$8.886
$36.549
$45.435
$6.387
$24.826
$31.213
$19.734
$25.026
$16.249
$21.068
Graph 4.1: Economic Impact of Proprietors’ Income
Center for Economic & Business Development at Southwestern Oklahoma State University 23
Statewide Economic Impact (Block 4: Wage, Price and Cost Variables)
Income Tax is derived from Personal In-come.
When this amount is subtracted
from Personal Income, it will result in Dis-posable
Personal Income. It is important to
note that the income tax impact present in
this study represent the revenues (through
the spillover effects from Manufacturing’s
employment) received by the state.17
The composition of income tax revenue
has to be traced back to Personal Income.
Personal Income is calculated as the sum
of wage and salary disbursements, sup-plements
to wages and salaries, propri-etors’
income with inventory valuation and
capital consumption adjustments, rental in-come
of persons with capital consumption
adjustments, personal dividend income,
personal interest income, and personal
current transfer receipts, less contributions
for government social insurance.
The personal income of an area is the in-come
that is received by, or on behalf of,
all the individuals who live in the area;
therefore, the estimates of personal in-come
are presented by the place of resi-dence
of the income recipients.
The economic impact of Manufacturing
on income tax revenue is significant over
time. If nothing changes economically, in-come
tax revenues would equal $8.946
billion at the baseline level in 2031. This
amount would boost to $10.232 billion if
Manufacturing’s activities were included
in the statewide economy, which translates
into 14.4 percent of income tax revenue
impact or $1.286 billion. The study fore-casted
that the income tax impact would
leap by 184.5 percent within the twenty
year time period.
The average income tax impact is esti-mated
to rise by $0.814 billion per year
and is projected to grow at an average
speed of 5.4 percent annually.
Income Taxes It is a BEA
(Bureau of Economic Anal-ysis)
concept of personal
income taxes, which when
subtracted from personal
income (income received
by persons from all sourc-es),
resulted in disposable
personal income (total af-ter
tax income received
by persons; it is the in-come
available to persons
for spending or saving)
Affected By: Personal In-come
Affecting: Dispos-able
Personal Income
Income Taxes
0
2
4
6
8
10
12
Without Manufacturing
Economic Impact
With Manufacturing
2011 2016 2021 2026 2031 Average
(Billions of Current $)
$0.452 $0.608 $0.786
$5.765
$6.551
$0.997
$7.096
$8.093
$1.286
$8.946
$10.232
$0.814
$5.890
$6.704
$4.516
$5.124
$3.487
$3.939
Graph 4.2: Economic Impact of Income Taxes
24 Center for Economic & Business Development at Southwestern Oklahoma State University
Conclusion
Based on these findings, the economic impact of Manufacturing remains significant and positively affects the statewide
economic activities. The following provides a snapshot of the economic impact of Manufacturing upon the state’s economy
in 2031:
State Output Impact would account for $154.972 billion
Gross State Product Impact would account for $65.402 billion
Real Disposable Personal Income Impact would account for $42.999 billion
Employment Impact would account for 328,540 net new jobs
Conclusion:
Center for Economic & Business Development at Southwestern Oklahoma State University 25
Regional Economic Impact
Alfalfa
Beaver
Blaine
Cimarron
Custer
Dewey
Ellis
Grant
Harper
Major
Roger Mills
Texas
Woods
Woodward
Northwest Counties
Map 5.1: Manufacturing Overview - Northwest Oklahoma
Manufacturing - Total Establishment
Manufacturing - Total Employment
Manufacturing - Average Annual Wage
All Industries - Total Establishment
All Industries - Total Employment
All Industries - Average Annual Wage
Manufacturing as a Percent of All Establishment
Manufacturing as a Percent of All Employment
240
5,811
$38,699
6,487
77,435
$30,628
3.7%
7.5%
Source: Oklahoma Employment Security Commission (2009)
region. As noted in the map, Manufactur-ing
jobs in this region pay more than 26.4
percent above all industries on average
annual wage.
The region has an employment multiplier
of 1.8. This means, with every 100 new
jobs created in Manufacturing, an addi-tional
180 jobs will be created.
The top three distinct manufacturing in-dustries
in the northwest region include
Food manufacturing, Machinery manu-facturing,
and Fabricated Metal Product
manufacturing. Among all, Food manufac-turing
remained the largest employer in
the region, employing more than 2,709
people (47percent) in 2009. By compari-son,
Machinery manufacturing made up
the second largest share of 15.2 percent
(885 jobs), while the Fabricated Metal
Product manufacturing sustained 626 jobs
(10.8 percent) in the region.
Table 5.1 summarizes the economic im-pact
results for the northwest region. (On
next page)
To analyze the economic impact of
Manufacturing at the regional level,
the state of Oklahoma is divided into 6
sub-state regions. The magnitude of eco-nomic
impact for each region differs de-pending
on the volume of economic ac-tivity
stimulated by Manufacturing, and
stems from the nature of the economic
structure, activities, and labor market con-dition
of the region.
In 2009, the northwest region was com-prised
of 240 manufacturers, which sup-ported
more than 5,811 jobs, both full
and part time. Together, these 5,811 jobs
in the region accounted for 7.5 percent
of total employment in the region, and
manufacturing comprised of 3.7 percent
of the total industry establishment.
Manufacturing pays some of the highest
wages compared to all industries in the
Northwest Oklahoma
With an employment
multiplier of 1.8, Manu-facturing’s
direct, indirect
and induced impact upon
Northwest Oklahoma are
estimated to add 10,638
net new jobs by 2031.
26 Center for Economic & Business Development at Southwestern Oklahoma State University
Regional Economic Impact
In 2011, employment gains in Manufac-turing
are projected to outpace popula-tion
growth by 52.7 percent, suggesting
the sector is continuing to expand its role
in stimulating regional economic activities.
Manufacturing’s impact on employment is
estimated to create an additional 10,243
net new jobs.
Population impact is predicted to grow
from 6,710 people in 2011 to 17,167
people in 2031. The projected population
growth is largely affected by the influx
of economic migrants entering the region.
Economic migrants entering the region are
predicted to total 1,722 people in 2011,
representing a 25.7 percent gain in total
population. Labor force impact, on the
other hand, would surge to 9,978 people
by 2031.
Real disposable personal income impact
is forecasted to realize an average of
$0.699 billion per year, hindering an av-erage
growth rate of 5.3 percent yearly.
On the flip side, manufacturing’s impact
upon regional proprietors’ income would
average $0.062 billion annually.
Manufacturing’s impact on total actual
capital stock would ramp up to $2.140
billion by 2031. The impact on GRP is
estimated to an increase to an average
$1.145 billion yearly. Regional con-sumption,
as a component of GRP, would
grow by $0.575 billion annually, which
would account for 50.2 percent of GRP.
By 2031, regional output is predicted to
equal $4.966 billion and average annual
growth rate of regional output is project-ed
to rise by 4.4 percent annually.
2021 2026 2031
Variable
Table 5.1: Northwest Oklahoma Economic Impact (in billions of current $)
Variable
Gross Regional Product
Consumption
Real Disposable Personal Income
Regional Output
Proprietors’ Income
Income Taxes
2011 $0.719
$0.298
$0.394
$2.090
$0.058
$0.011
2016
$0.880 $1.108 $1.374
$0.718
$0.857
$3.979
$0.067
$0.025
$1.727
$0.906
$1.110
$4.966
$0.080
$0.032
$1.145
$0.575
$0.699
$3.319
$0.062
$0.021
$0.561
$0.673
$3.218
$0.058
$0.020
$0.419
$0.521
$2.566
$0.055
$0.016
Average
2011 2031 Average
Capital Stock $0.150 $2.140 $1.052
Residential Actual Capital Stock $0.105 $1.638 $0.791
Nonresidential Actual Capital Stock $0.045 $0.502 $0.261
Employment (People) 10,243 10,689 10,328
Labor Force (People) 5,830 9,978 8,856
Population (People) 6,710 17,167 13,985
Net Economic Migrants (People) 1,722 - 370
Center for Economic & Business Development at Southwestern Oklahoma State University 27
Regional Economic Impact
Adair
Cherokee
Craig
Delaware
Kay
McIntosh
Mayes
Muskogee
Noble
Notawa
Okfuskee
Ottawa
Payne
Sequoyah
Washington
Northeast Counties
Map 5.2: Manufacturing Overview - Northeast Oklahoma
Manufacturing - Total Establishment
Manufacturing - Total Employment
Manufacturing - Average Annual Wage
All Industries - Total Establishment
All Industries - Total Employment
All Industries - Average Annual Wage
Manufacturing as a Percent of All Establishment
Manufacturing as a Percent of All Employment
562
18,831
$35,123
11,230
181,065
$29,846
5%
10.4%
Source: Oklahoma Employment Security Commission (2009)
With an employment
multiplier of 2.1, Manu-facturing’s
direct, indirect
and induced impact upon
Northeast Oklahoma are
estimated to add 42,937
net new jobs by 2031.
Northeast Oklahoma
region. As noted in the map, Manufactur-ing
jobs in this region pay more than 17.7
percent above all industries on average
annual wage.
The region has an employment multiplier
of 2.1. This means, with every 100 new
jobs created in Manufacturing, an addi-tional
210 jobs will be created.
The top three distinct manufacturing in-dustries
in the northeast region include
Machinery manufacturing, Food manu-facturing,
and Fabricated Metal Product
manufacturing. Among all, Machinery
manufacturing remained the largest em-ployer
in the region, employing more than
3,909 people (20.8 percent) in 2009. By
comparison, Food manufacturing made
up the second largest share of 12.5 per-cent
(2,350 jobs), while the Fabricated
Metal Product manufacturing sustained
1,885 jobs (10 percent) in the region.
Table 5.2 summarizes the economic im-pact
results for the northeast region. (on
next page)
To analyze the economic impact of
Manufacturing at the regional level,
the state of Oklahoma is divided into 6
sub-state regions. The magnitude of eco-nomic
impact for each region differs de-pending
on the volume of economic ac-tivity
stimulated by Manufacturing, and
stems from the nature of the economic
structure, activities, and labor market con-dition
of the region.
In 2009, the northeast region was com-prised
of 562 manufacturers, which sup-ported
more than 18,831 jobs, both full
and part time. Together, these 18,831
jobs accounted for 10.4 percent of total
employment of all industries, and manu-facturing
comprised of 5 percent of the
total industry establishment.
Manufacturing pays some of the highest
wages compared to all industries in the
28 Center for Economic & Business Development at Southwestern Oklahoma State University
Regional Economic Impact
In 2011, employment gains in Manufac-turing
are projected to outpace popula-tion
growth by 51 percent, suggesting the
sector is continuing to expand its role in
stimulating regional economic activities.
Manufacturing’s impact on employment is
estimated to create an additional 38,767
net new jobs.
Population impact is predicted to grow
from 25,666 people in 2011 to 77,558
people in 2031. The projected population
growth is largely affected by the influx
of economic migrants entering the region.
Economic migrants entering the region are
predicted to total 7,130 people in 2011,
representing a 27.8 percent gain in to-tal
population. Labor force impact, on
the other hand, would surge to 40,980
people by 2031.
Real disposable personal income impact
is forecasted to realize an average of
$2.846 billion per year, hindering an av-erage
growth rate of 5.7 percent yearly.
On the flip side, manufacturing’s impact
upon regional proprietors’ income would
average $0.148 billion annually.
Manufacturing’s impact on total actual
capital stock would ramp up to $9.036
billion by 2031. The impact on GRP is es-timated
to increase to average $4.596
billion yearly. Regional consumption, as
a component of GRP, would grow by
$2.301 billion annually, which would ac-count
for 50 percent of GRP. By 2031,
regional output is predicted to equal
$16.488 billion and average annual
growth rate of regional output is project-ed
to rise by 4.8 percent annually.
Variable
Table 5.2: Northeast Oklahoma Economic Impact (in billions of current $)
Variable
Gross Regional Product
Consumption
Real Disposable Personal Income
Regional Output
Proprietors’ Income
Income Taxes
2011
$2.725
$1.148
$1.526
$6.409
$0.145
$0.045
2016
$3.452 $4.444 $5.588
$2.901
$3.533
$12.966
$0.156
$0.105
$7.119
$3.735
$4.605
$16.488
$0.187
$0.137
$4.596
$2.301
$2.846
$10.684
$0.148
$0.085
$2.237
$2.736
$10.313
$0.136
$0.082
$1.640
$2.069
$8.073
$0.133
$0.062
2021 2026 2031 Average
2011 2031 Average
Capital Stock $0.606 $9.036 $4.383
Residential Actual Capital Stock $0.409 $6.779 $3.206
Nonresidential Actual Capital Stock $0.197 $2.257 $1.177
Employment (People) 38,767 42,937 40,416
Labor Force (People) 21,057 40,980 34,922
Population (People) 25,666 77,558 59,958
Net Economic Migrants (People) 7,130 209 2,117
Center for Economic & Business Development at Southwestern Oklahoma State University 29
Regional Economic Impact
Beckham
Caddo
Comanche
Cotton
Greer
Harmon
Jackson
Kiowa
Stephens
Tillman
Washita
Southwest Counties
Map 5.3: Manufacturing Overview - Southwest Oklahoma
Manufacturing - Total Establishment
Manufacturing - Total Employment
Manufacturing - Average Annual Wage
All Industries - Total Establishment
All Industries - Total Employment
All Industries - Average Annual Wage
Manufacturing as a Percent of All Establishment
Manufacturing as a Percent of All Employment
202
7,351
$37,690
6,629
95,093
$30,406
3.0%
7.7%
Source: Oklahoma Employment Security Commission (2009)
With an employment
multiplier of 2.0, Manu-facturing’s
direct, indirect
and induced impact upon
Southwest Oklahoma are
estimated to add 15,699
net new jobs by 2031.
region. As noted in the map, Manufactur-ing
jobs in this region pay more than 24
percent above all industries on average
annual wage.
The region has an employment multiplier
of 2. This means, with every 100 new jobs
created in Manufacturing, an additional
200 jobs will be created.
The top three distinct manufacturing in-dustries
in the southwest region include
Plastic and Rubber Product manufactur-ing,
Machinery manufacturing, and Food
manufacturing. Among all, Plastic and
Rubber manufacturing remained the larg-est
employer in the region, employing
more than 2,725 people (37.1 percent)
in 2009. By comparison, Machinery man-ufacturing
made up the second largest
share of 19.3 percent (1,416 jobs), while
the Food manufacturing sustained 1,053
jobs (14.3 percent) in the region.
Table 5.3 summarizes the economic im-pact
results for the southwest region. (on
next page)
To analyze the economic impact of
Manufacturing at the regional level,
the state of Oklahoma is divided into 6
sub-state regions. The magnitude of eco-nomic
impact for each region differs de-pending
on the volume of economic ac-tivity
stimulated by Manufacturing, and
stems from the nature of the economic
structure, activities, and labor market con-dition
of the region.
In 2009, the southwest region was com-prised
of 202 manufacturers, which sup-ported
more than 7,351 jobs, both full
and part time. Together, these 7,351 jobs
accounted for 7.7 percent of total em-ployment
of all industries, and manufac-turing
comprised of 3 percent of the total
industry establishment.
Manufacturing pays some of the highest
wages compared to all industries in the
Southwest Oklahoma
30 Center for Economic & Business Development at Southwestern Oklahoma State University
Regional Economic Impact
In 2011, employment gains in Manufac-turing
are projected to outpace popula-tion
growth by 9 percent, suggesting the
sector is continuing to expand its role in
stimulating regional economic activities.
Manufacturing’s impact on employment is
estimated to create an additional 13,464
net new jobs.
Population impact is predicted to grow
from 12,351 people in 2011 to 37,882
people in 2031. The projected population
growth is largely affected by the influx
of economic migrants entering the region.
Economic migrants entering the region are
predicted to total 3,369 people in 2011,
representing a 27.3 percent gain in to-tal
population. Labor force impact, on
the other hand, would surge to 18,736
people by 2031.
Real disposable personal income impact
is forecasted to realize an average of
$1.162 billion per year, hindering an av-erage
growth rate of 5.7 percent yearly.
On the flip side, manufacturing’s impact
upon regional proprietors’ income would
average $0.020 billion annually.
Manufacturing’s impact on total actual
capital stock would ramp up to $2.825
billion by 2031. The impact on GRP is es-timated
to increase to an average $2.036
billion yearly. Regional consumption, as a
component of GRP, would grow by $0.950
billion annually, which would account for
46.6 percent of GRP. By 2031, regional
output is predicted to equal $7.623 bil-lion
and average annual growth rate of
regional output is projected to rise by 5.2
percent annually.
Variable
Table 5.3: Southwest Oklahoma Economic Impact (in billions of current $)
Variable
Gross Regional Product
Consumption
Real Disposable Personal Income
Regional Output
Proprietors’ Income
Income Taxes
2011
$1.148
$0.461
$0.619
$2.769
$0.041
$0.018
2016
$1.518 $1.989 $2.491
$1.207
$1.443
$6.054
$0.012
$0.042
$3.153
$1.549
$1.872
$7.623
$0.010
$0.054
$2.036
$0.950
$1.162
$4.946
$0.020
$0.034
$0.924
$1.120
$4.841
$0.016
$0.033
$0.668
$0.847
$3.697
$0.027
$0.025
2021 2026 2031 Average
2011 2031 Average
Capital Stock $0.186 $2.825 $1.360
Residential Actual Capital Stock $0.128 $2.142 $1.014
Nonresidential Actual Capital Stock $0.058 $0.683 $0.346
Employment (People) 13,464 15,699 14,583
Labor Force (People) 9,779 18,736 16,040
Population (People) 12,351 37,882 29,130
Net Economic Migrants (People) 3,369 - 936
Center for Economic & Business Development at Southwestern Oklahoma State University 31
Regional Economic Impact
Atoka
Bryan
Carter
Choctaw
Coal
Garvin
Haskell
Hughes
Johnston
Latimer
Le Flore
Love
McCurtain
Marshall
Murray
Pittsburg
Pontotoc
Pottawatomie
Pushmataha
Seminole
Southeast Counties
Map 2.4: Manufacturing Overview - Southeast Oklahoma
Manufacturing - Total Establishment
Manufacturing - Total Employment
Manufacturing - Average Annual Wage
All Industries - Total Establishment
All Industries - Total Employment
All Industries - Average Annual Wage
Manufacturing as a Percent of All Establishment
Manufacturing as a Percent of All Employment
496
18,473
$33,885
11,294
168,549
$29,283
4.4%
11.0%
Source: Oklahoma Employment Security Commission (2009)
With an employment
multiplier of 2.1, Manu-facturing’s
direct, indirect
and induced impact upon
Southeast Oklahoma are
estimated to add 41,775
net new jobs by 2031.
region. As noted in the map, Manufactur-ing
jobs in this region pay more than 15.7
percent above all industries on average
annual wage.
The region has an employment multiplier
of 2.1. This means, with every 100 new
jobs created in Manufacturing, an addi-tional
210 jobs will be created.
The top three distinct manufacturing in-dustries
in southeast region include Food
manufacturing, Plastic and Rubber manu-facturing,
and Machinery manufacturing.
Among all, Food manufacturing took over
Plastic and Rubber manufacturing and
became the largest employer in the re-gion,
employing more than 4,002 people
(21.6 percent) in 2009. By comparison,
Plastic and Rubber manufacturing made
up the second largest share of 20.2 per-cent
(3,729 jobs), while the fabricated
metal product manufacturing sustained
2,098 jobs (11.4 percent) in the region.
Table 5.4 summarizes the economic im-pact
results for the southeast region.
To analyze the economic impact of
Manufacturing at the regional level,
the state of Oklahoma is divided into 6
sub-state regions. The magnitude of eco-nomic
impact for each region differs de-pending
on the volume of economic ac-tivities
stimulated by Manufacturing, and
stems from the nature of the economic
structure, activities, and labor market con-dition
of the region.
In 2009, the southeast region was com-prised
of 496 manufacturers, which sup-ported
more than 18,473 jobs, both full
and part time. Together, these 18,473
jobs accounted for 11 percent of total
employment of all industries, and manu-facturing
comprised of 4.4 percent of the
total industry establishment.
Manufacturing pays some of the highest
wages compared to all industries in the
Southeast Oklahoma
32 Center for Economic & Business Development at Southwestern Oklahoma State University
Regional Economic Impact
In 2011, employment gains in Manufac-turing
are projected to outpace popula-tion
growth by 133 percent, suggesting
the sector is continuing to expand its role
in stimulating regional economic activities.
Manufacturing’s impact on employment is
estimated to create an additional 37,585
net new jobs.
Population impact is predicted to grow
from 28,265 people in 2011 to 84,447
people in 2031. The projected population
growth is largely affected by the influx
of economic migrants entering the region.
Economic migrants entering the region are
predicted to total 7,733 people in 2011,
representing a 27.4 percent gain in to-tal
population. Labor force impact, on
the other hand, would surge to 43,098
people by 2031.
Real disposable personal income impact
is forecasted to realize an average of
$2.807 billion per year, hindering an av-erage
growth rate of 5.7 percent yearly.
On the flip side, manufacturing’s impact
upon regional proprietors’ income would
average $0.163 billion annually.
Manufacturing’s impact on total actual
capital stock would ramp up to $9.273
billion by 2031. The impact on GRP is
estimated to increase to an average
$4.397 billion yearly. Regional con-sumption,
as a component of GRP would
grow by $2.256 billion annually, which
would account for 51.3 percent of GRP.
By 2031, regional output is predicted to
equal $19.423 billion and average an-nual
growth rate of regional output is
projected to rise by 4.8 percent annually.
Variable
2021 2026 2031
Table 5.4: Southeast Oklahoma Economic Impact (in billions of current $)
Variable
Gross Regional Product
Consumption
Real Disposable Personal Income
Regional Output
Proprietors’ Income
Income Taxes
2011 $2.651
$1.127
$1.499
$7.591
$0.168
$0.044
2016
$3.337 $4.266 $5.320
$2.848
$3.491
$15.464
$0.169
$0.102
$6.717
$3.654
$4.544
$19.423
$0.197
$0.133
$4.397
$2.256
$2.807
$12.764
$0.163
$0.083
$2.193
$2.699
$12.420
$0.151
$0.080
$1.604
$2.036
$9.710
$0.150
$0.060
Average
2011 2031 Average
Capital Stock $0.626 $9.273 $4.492
Residential Actual Capital Stock $0.407 $6.774 $3.201
Nonresidential Actual Capital Stock $0.219 $2.499 $1.290
Employment (People) 37,585 41,775 39,261
Labor Force (People) 22,361 43,098 36,749
Population (People) 28,265 84,447 65,530
Net Economic Migrants (People) 7,733 61 2,192
Center for Economic & Business Development at Southwestern Oklahoma State University 33
Regional Economic Impact
Canadian
Cleveland
Grady
Lincoln
Logan
McClain
Oklahoma
OKC MSA Counties
Map 2.5: Manufacturing Overview - OKC MSA
Manufacturing - Total Establishment
Manufacturing - Total Employment
Manufacturing - Average Annual Wage
All Industries - Total Establishment
All Industries - Total Employment
All Industries - Average Annual Wage
Manufacturing as a Percent of All Establishment
Manufacturing as a Percent of All Employment
1,333
32,750
$50,237
33,983
542,653
$32,259
3.9%
6.0%
Source: Oklahoma Employment Security Commission (2009)
With an employment
multiplier of 2.7, Manu-facturing’s
direct, indirect
and induced impact upon
OKC MSA are estimated
to add 93,513 net new
jobs by 2031.
region. As noted in the map, Manufactur-ing
jobs in this region pay more than 55.7
percent above all industries on average
annual wage.
The region has an employment multiplier
of 2.7. This means, with every 100 new
jobs created in Manufacturing, an addi-tional
270 jobs will be created.
The top three distinct manufacturing in-dustries
in OKC MSA include Machinery
manufacturing, Fabricated Metal Product
manufacturing, and Transportation Equip-ment
manufacturing. Among all, Machin-ery
manufacturing remained as the larg-est
employer in the region, employing
more than 7,071 people (21.7 percent) in
2009. By comparison, Fabricated Metal
Product manufacturing made up the sec-ond
largest share of 17.1 percent (5,588
jobs), while the fabricated metal product
manufacturing sustained 3,430 jobs (10.5
percent) in the region.
Table 5.5 summarizes the economic im-pact
results for the OKC MSA region. (on
next page)
To analyze the economic impact of
Manufacturing at the regional level,
the state of Oklahoma is divided into 6
sub-state regions. The magnitude of eco-nomic
impact for each region differs de-pending
on the volume of economic ac-tivities
stimulated by Manufacturing, and
stems from the nature of the economic
structure, activities, and labor market con-dition
of the region.
In 2009, the OKC MSA was comprised
of 1,333 manufacturers, which supported
more than 32,750 jobs, both full and part
time. Together, these 32,750 jobs ac-counted
for 6.0 percent of total employ-ment
of all industries, and manufacturing
comprised of 3.9 percent of the total in-dustry
establishment.
Manufacturing pays some of the highest
wages compared to all industries in the
OKC MSA
34 Center for Economic & Business Development at Southwestern Oklahoma State University
Regional Economic Impact
In 2011, employment gains in Manufac-turing
are projected to outpace popula-tion
growth by 103 percent, suggesting
the sector is continuing to expand its role
in stimulating regional economic activities.
Manufacturing’s impact on employment is
estimated to create an additional 84,461
net new jobs.
Population impact is predicted to grow
from 41,615 people in 2011 to 140,710
people in 2031. The projected population
growth is largely affected by the influx
of economic migrants entering the region.
Economic migrants entering the region
are predicted to total 11,960 people in
2011, representing a 28.7 percent gain
in total population. Labor force impact,
on the other hand, would surge to 71,225
people by 2031.
Real disposable personal income impact
is forecasted to realize an average of
$8.042 billion per year, hindering an av-erage
growth rate of 5.2 percent yearly.
On the flip side, manufacturing’s impact
upon regional proprietors’ income would
average $2.456 billion annually.
Manufacturing’s impact on total actual
capital stock would ramp up to $23.397
billion by 2031. The impact on GRP is esti-mated
to increase to an average $12.059
billion yearly. Regional consumption, as
a component of GRP, would grow by
$6.117 billion annually, which would ac-count
for 50.7 percent of regional GRP.
By 2031, regional output is predicted to
equal $40.837 billion and average an-nual
growth rate of regional output is pro-jected
to rise by 5 percent annually.
Variable
2021 2026 2031
Table 5.5: OKC MSA Economic Impact (in billions of current $)
Variable
Gross Regional Product
Consumption
Real Disposable Personal Income
Regional Output
Proprietors’ Income
Income Taxes
2011 $7.087
$3.343
$4.660
$15.351
$1.795
$0.137
2016
$8.929 $11.552 $14.726
$7.576
$9.832
$31.706
$2.831
$0.298
$19.076
$9.722
$12.732
$40.837
$3.458
$0.384
$12.059
$6.117
$8.042
$25.990
$2.456
$0.244
$5.917
$7.706
$24.912
$2.369
$0.235
$4.475
$5.982
$19.359
$2.009
$0.183
Average
2011 2031 Average
Capital Stock $1.682 $23.397 $11.527
Residential Actual Capital Stock $1.184 $17.615 $8.522
Nonresidential Actual Capital Stock $0.499 $5.782 $2.995
Employment (People) 84,461 93,513 87,119
Labor Force (People) 33,580 71,225 59,044
Population (People) 41,615 140,710 104,820
Net Economic Migrants (People) 11,960 719 3,909
Center for Economic & Business Development at Southwestern Oklahoma State University 35
Regional Economic Impact
Creek
Okmulgee
Osage
Pownee
Rogers
Tulsa
Wagoner
Tulsa MSA Counties
Map 2.6: Manufacturing Overview - Tulsa MSA
Manufacturing - Total Establishment
Manufacturing - Total Employment
Manufacturing - Average Annual Wage
All Industries - Total Establishment
All Industries - Total Employment
All Industries - Average Annual Wage
Manufacturing as a Percent of All Establishment
Manufacturing as a Percent of All Employment
1,587
46,785
$48,875
25,053
401,529
$33,877
6.3%
11.7%
Source: Oklahoma Employment Security Commission (2009)
With an employment
multiplier of 2.5, Manu-facturing’s
direct, indirect
and induced impact upon
Tulsa MSA are estimated
to add 123,927 net new
jobs by 2031.
region. As noted in the map, Manufactur-ing
jobs in this region pay more than 44.3
percent above all industries on average
annual wage.
The region has an employment multiplier
of 2.5. This means, with every 100 new
jobs created in Manufacturing, an addi-tional
250 jobs will be created.
The top three distinct manufacturing in-dustries
in Tulsa MSA include Fabricated
Metal Product manufacturing, Machin-ery
manufacturing, and Transportation
Equipment manufacturing. Among all,
Fabricated Metal Product manufactur-ing
remained as the largest employer in
the region, employing more than 11,006
people (23.5 percent) in 2009. By com-parison,
Machinery manufacturing made
up the second largest share of 23.1 per-cent
(10,808 jobs), while the Transporta-tion
Equipment manufacturing sustained
5,278 jobs (11.3 percent) in the region.
Table 5.6 summarizes the economic im-pact
results for the Tulsa MSA. (on next
page)
To analyze the economic impact of
Manufacturing at the regional level,
the state of Oklahoma is divided into 6
sub-state regions. The magnitude of eco-nomic
impact for each region differs de-pending
on the volume of economic ac-tivity
stimulated by Manufacturing, and
stems from the nature of the economic
structure, activities, and labor market con-dition
of the region.
In 2009, the Tulsa MSA was comprised
of 1,587 manufacturers, which supported
more than 46,785 jobs, both full and part
time. Together, these 46,785 jobs ac-counted
for 11.7 percent of total employ-ment
of all industries, and manufacturing
comprised of 6.3 percent of the total in-dustry
establishment.
Manufacturing pays some of the highest
wages compared to all industries in the
Tulsa MSA
36 Center for Economic & Business Development at Southwestern Oklahoma State University
Regional Economic Impact
In 2011, employment gains in Manufac-turing
are projected to outpace popula-tion
growth by 86.1 percent, suggesting
the sector is continuing to expand its role
in stimulating regional economic activi-ties.
Manufacturing’s impact on employ-ment
is estimated to create an additional
114,770 net new jobs.
Population impact is predicted to grow
from 61,670 people in 2011 to 194,865
people in 2031. The projected popula-tion
growth is largely affected by the
influx of economic migrants entering the
region. Economic migrants entering the
region are predicted to total 17,130
people in 2011, representing a 27.8 per-cent
gain in total population. Labor force
impact, on the other hand, would surge to
98,515 people by 2031.
Real disposable personal income impact
is forecasted to realize an average of
$11.443 billion per year, hindering an
average growth rate of 5.0 percent year-ly.
On the flip side, manufacturing’s impact
upon regional proprietors’ income would
average $3.538 billion annually.
Manufacturing’s impact on total actual
capital stock would ramp up to $34.166
billion by 2031. The impact on GRP is
estimated to increase to an average
$17.593 billion yearly. Regional con-sumption,
as a component of GRP, would
grow by $8.806 billion annually, which
would account for 50 percent of regional
GRP. By 2031, regional output is predict-ed
to equal $65.673 billion and average
annual growth rate of regional output is
projected to rise by 5.0 percent annually.
Variable
Table 5.6: Tulsa MSA Economic Impact (in billions of current $)
Variable
Gross Regional Product
Consumption
Real Disposable Personal Income
Regional Output
Proprietors’ Income
Income Taxes
2011
$10.536
$4.838
$6.681
$24.841
$2.613
$0.198
2016
$13.152 $16.868 $21.332
$10.865
$13.935
$51.028
$4.044
$0.424
$27.610
$13.904
$18.042
$65.673
$4.953
$0.547
$17.593
$8.806
$11.443
$41.973
$3.538
$0.349
$8.538
$10.983
$40.331
$3.418
$0.336
$6.489
$8.553
$31.405
$2.917
$0.262
2021 2026 2031 Average
2011 2031 Average
Capital Stock $2.572 $34.166 $17.104
Residential Actual Capital Stock $1.708 $25.181 $12.237
Nonresidential Actual Capital Stock $0.864 $8.985 $4.867
Employment (People) 114,770 123,927 116,710
Labor Force (People) 49,347 98,515 83,086
Population (People) 61,670 194,865 147,851
Net Economic Migrants (People) 17,130 715 5,162
Center for Economic & Business Development at Southwestern Oklahoma State University 37
References
1. Advance Gross Domestic Product by Industry (2010), Bureau of Economic Analysis, (http://www.bea.gov/newsreleases/industry/gdpindus-try/
gdpindnewsrelease.htm)
2. International Comparisons of Manufacturing Productivity and Unit Labor Cost Trends in 2009 (December 21, 2010), Bureau of Labor Statis-tics,
U.S. Department of Labor, (http://www.bls.gov/news.release/prod4.nr0.htm)
3. 2010 Gross Domestic Product by State, Bureau of Economic Analysis
4. Competing and Winning in a Global Economy, US Department of Commerce, (http://www.manufacturing.gov/report/competing.pdf)
5. Employment Database (2007 - 2009), Oklahoma Employment Security Commission
6. Richard McPherson and Lynn Gray (May 2011) Oklahoma Economic Indicators, Oklahoma Employment Security Commission
7. Oklahoma Manufacturing Facts, National Association of Manufacturers, (http://www.nam.org/~/media/A11D3C9D16F14B16BE10DE311
7E15310.ashx)
8. 2011 ACE Book, Oklahoma 21st Century-Research Foundation Affiliate of The State Chamber, (http://www.ok21stcentury.com/images/
uploads/2011ACEBook.pdf)
9. Kail M Padgitt (October 2010, Number 60), 2011 State Business Tax Climate, Tax Foundation
10. 2010 Oklahoma Export Report, Oklahoma Department of Commerce, (http://www.okcommerce.gov/Libraries/Documents/2010-Oklahoma-
Exports-Overview-1_3263.pdf)
11. State Exports for Oklahoma, U.S. Census Bureau, (http://www.census.gov/foreign-trade/statistics/state/data/ok.html)
12. Daniel Griswold (June, 2011), ‘Trade Agreements Promote U.S. Manufacturing Exports’, (http://www.cato-at-liberty.org/trade-agreements-promote-
u-s-manufacturing-exports/)
13. 2009 Oklahoma Export Statistics Report, The State Chamber of Oklahoma, (http://www.okstatechamber.com/additional/
pdf/09OKExportReport.pdf)
14. George Treyz, Regional Economic Modeling, Kluwer Academic Publishers, 1993
15. Office of Management & Budget
16. Resource System Group, Inc.
17. The Oklahoma Tax Commission (http://www.oktax.state.ok.us) reports $3,250,058,797 of income tax was collected in 2009. The Bureau
of Economic Analysis (http://www.bea.gov) reports personal income in Oklahoma equaled $132,132,355,000 in 2009. The proportion of
income tax collected to personal income equals 2.46% The calculation for Oklahoma tax revenue applies to the same proportion (income tax
collected/ personal income = 2.46%) to the personal income figure reported by the REMI model.
References:
Center for Economic & Business Development 100 Campus Drive
Weatherford, OK 73096
Phone (580) 774-7095
Fax (580) 774-7096
cebd@swosu.edu
www.swosu.edu/cebd
© 2011 Southwestern Oklahoma State University’s Center for Economic & Business Development
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