FROM STAFF REPORTS
Jolted from a stock market hangover, investors are awakening to a bright new year.
After those first few woeful days, 2001 has started with a zing following the Fed's decision to cut interest rates a whopping half a percentage point - the biggest reduction in more than eight years.
The surprise action Wednesday by Federal Reserve Chairman Alan Greenspan and his crew comes as welcome news to investors and pundits alike who have been fretting about the economy's future.
The interest rate cut is an indication that the economy will continue to grow, said Craig Knutson, staff economist for Southwestern Bell in Okahoma City.
"The fact is that all of us will benefit, whether we're in Mississippi, Tulsa or New York," he said. "Higher interest rates discourage people from borrowing capital."
"Two-thirds of the economy is consumer spending", Knutson pointed out. Higher interest rates tend to make people sit on their wallets and wait for rates to come down.
Company expansion should benefit as loan activity picks up, and lower interest rates help more money circulate in the economy", Knutson said. Lower rates also provide an excellent opportunity for homeowners to refinance their mortgages and have lower monthly payments.
So what lies ahead for Tulsa, specifically?
Take a look into our crystal ball for a glimpse of what may happen locally in the year ahead.
Economy
Some projections have the Tulsa area economy outperforming both the state and nation this year.
The potential for growth in 2001, however, will remain somewhat constrained due to a tight labor market and rising energy prices.
Though the area's growth may slow to 3 percent from recent levels of 5 percent to 6 percent, that is still magnificant growth, said Mike Davidsson, economic research manager for the Tulsa Metro Chamber. The population in the Tulsa metropolitan statistical area is expected to grow to 801,610, resulting in unemployment rate gains to 3.2 percent, according to chamber statistics.
The number of jobs in the area is expected to increase by 2 pecent, up to 405,582. An employment outlook survey by Manpower Inc. forecasts a moderate hiring pace for the Tulsa area during the first quarter of 2001, with 27 percent of the companies queried planning to increase staffing levels.
A 1999 report released by Oklahoma State University noted that total personal income for the local region should increase 5 percent this year. The Tulsa area also is expected to continue to outpace the state in per capita income, reaching $29,065 in 2001, or 92 percent of the national average.
"I think our economy will be less ebullient - not as strong as it has been on average in the last decade, Tulsa specifically," said Fredric Russell, principal of Fredric E. Russell Investment Management Co. "The boom in technology has peaked. We're not going to see the expansion and production and the firing of people to the extent that we saw in the last 10 years - particularly the last five."
Added Russell: "I think the national economy is slowing down, and there is no way that Tulsa could escape that."
He said virtually every major business, including Helmerich & Payne Inc. and Williams Cos. Inc., sell outside Tulsa.
"What the big unknown will be, I think, is how fast the economy will restart itself, or will pick up steam again," Russell said.
Telecommunications
After a tumultuous year of technology stock sell-offs, company acquisitions and expansions, new services, new companies, litigation and government antitrust investigations, the telecommunications industry is expected to be a comparatively tranquil backwater in 2001, industry executives said. | Southwestern Bell is expected to be granted long-distance telephone authority in Oklahoma by the Federal Communications Commission this month. That is expected to spur competition in both the local and long-distance markets, industry analysts said, which should mean a break in some rates for customers. Jim Epperson, president of Southwestern Bell-Oklahoma, said the company will solve its service problems with its Digital Subscriber Line high-speed Internet service this year as it expands service beyond metropolitan areas to 39 cities and towns in Oklahoma. "When you're dealing with the hottest product on the market, there are back-logs," Epperson said.
WorldCom Inc., the Mississippi-based telecommunications company that employs 4,600 workers in Tulsa, will continue hiring at the rate of 75 to 80 people a month, said Tom Pipal, corporate training and development director.
He said 2001 will be marked by continued movement of voice, video and data traffic over Internet protocol and extensive educational efforts by WorldCom at area high schools and colleges. Project Click, a cooperative effort by two dozen telecommunications companies to introduce personal computers to hundreds of Oklahoma school districts, will continue in 2001, Pipal said.
"Long-term, what is good for Oklahoma is good for WorldCom. They're our kids, too," he said. "In 2001, I expect that Project Click will make tremendous progress in getting this technology out there and used by everyone."
At Williams Communications Group, the Tulsa-based telecommunications company that is building a 15-story technology center downtown, expects to continue hiring new employees at current levels and will need more office space by year's end, said Ken Epps, senior vice president and chief marketing officer.
"We expect demand for bandwidth to be extremely strong," Epps said. "In 2001, we clearly expect to meet every financial measure that we have announced. We expect to be very successful."
Technology
The crystal ball for Tulsa's technology sector looks golden for 2001, experts say.
Despite the fall of dot-comes last year, many technology startups in the area have escaped unharmed, said Ron Cooper, executive director of the Center of Excellence in Information Technology and Telecommunications, which coordinates efforts among Tulsa's public and private colleges and universities in an effort to create a "research triangle" similar to one that schools and businesses near Raleigh-Durham, N.C., established.
Cooper said the Sooner State is working hard to put itself on the nation's technology radar. Programs such as "Telecommunications and Information Security," a conference dealing with "cyber terrorism" last year at the University of Tulsa, have attracted national attention for T-town, he said. Cooper predicts more national technology conferences will take place this year in Oklahoma.
Cooper also expects there will be more interest among companies outside the state for funding research programs at Oklahoma colleges and universities in 2001.
Last year's erosion of the tech-dominated Nasdaq index is only a reflection of human behavior, said Randy Goldsmith, executive director of the Oklahoma Technology Commercialization Center in Oklahoma City.
We'll survive the dot-com meltdown," Goldsmith said. "Tulsa's presence in the Internet and telecom community is well documented, and Tulsa is extremely well positioned to capture the benefits of that."
Goldsmith said he expects his client companies will continue to receive funding.
"Investors still have an appetite for good, solid technology deals," he said.
Goldsmith said Oklahoma City will see continued growth for biotech companies, and he expects some branching out into the field of nanotechnology, the building of computers at a molecular level.
Tulsans will see a convergence of technologies leading to new technologies, companies and jobs, Goldsmith said. He expects companies to continue to explore business-to-business markets as well as the emerging field of application service providers.
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