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Economic Standing: Looking at Growth Trends in Norman

Economic Standing: Looking at Growth Trends in Norman

Over the last 10 years, Norman’s population has grown by about 16 percent.

What is Norman?

Is it a city with big development aspirations or is it a quiet college town? Is it on the rise, or is it amid a tactical retreat from development and sprawl?

Norman stands at a crossroads and the next 20 years could be impactful enough to answer that question.

But as Norman residents, developers, and anti-developers wrestle with whether to #EdmondmyNorman, perhaps a little context is a good place to start.

First, how is Norman growing?

Over the last 10 years, Norman’s population has grown by about 16 percent. That growth rate is higher than the national average and higher than similar communities like Boulder, Lawrence, and Ann Arbor.

Norman Economic Development Coalition interim president Maureen Hammond said that’s a positive sign. She also pointed to private sector growth which she said also outpaced peer communities at 18 percent over the last 10 years.

“One of the private growth industries in Norman is professional and scientific employment. We’ve seen large growth in private sector employment there.”

She said a variety of companies are driving that trend. She said Norman has also seen job growth in retail trade, health care and social assistance, and then professional, scientific, and technical services.

Norman is also doing better than the state as a whole on the population front. However, there has been a downturn in net migration over the last few years.

According to a report released last month by the Federal Reserve Bank of Kansas City, more people moved out of Oklahoma than moved in each year for the last three years.

According to the report, in 2017 and 2018, the state’s population grew less than 0.3 percent per year, Oklahoma’s slowest rate of growth since 1990. What’s more alarming is that a large number of those leaving the state are highly educated, working-age people — the kind of people that attract businesses and keep them running.

‘Global war for jobs and talent’

Hammond said retaining talent, particularly University of Oklahoma graduates, is one of the biggest challenges facing Norman and practically every city in what she called the “global war for jobs and talent.”

“We believe it’s critical to support and implement strategies that will address that concern moving forward,” she said. “The good news is that Norman is a fantastic community and we have so many assets.”

She said those assets include great schools, Norman Forward projects, and a major university that is a hub of entrepreneurial innovation.

She said the weather and radar industry is one the NEDC is targeting as a potential boom. In 2017, Canadian company Nanowave Technologies agreed to partner with Weathernews Inc. to build radars in Norman on the University of Oklahoma’s research campus.

“That’s exciting because they’re actually producing and manufacturing radars right here in Norman.”

Also in 2017, Weather Decision Support Systems launched from NEDC’s business incubator, Startup 405. The company emerged from Weather Decision Technologies (WDT) and Hammond said it was important for them to be close to other weather companies.

“That’s one of the reasons we located the incubator on OU’s research campus was to be part of the entrepreneurial ecosystem that is emerging there.”

Hammond said that the ecosystem includes the Tom Love Innovation Hub and the Ronnie K. Irani Center for the Creation of Economic Wealth.

“That’s why you want to be there,” she said. “The centralization of resources for start-ups is critical in the initial phases of starting a business. The collisions and synergy that spawn from all of those entities being nearby hopefully will produce more start-ups.”

And with start-ups come jobs.

“That’s what NEDC is all about job creation,” she said.

Jobs and quality of life are the biggest attractors for working-age talent. And Hammond said there are promising signs on that front, too.

“Last year, we issued a business conditions report. We surveyed a range of employers in the community and from that survey, nearly half of those companies were projecting increases in jobs in the next three years,” she said.

How many jobs? Hammond said the companies referenced in the report project an additional 1,600 jobs will be added over the next three years.

Norman also has a significant entrepreneurial makeup, with roughly 11 percent of the Norman workforce being self-employed.

“A great deal of the start-ups we have met with have been laid off, usually in oil and gas,” she said. “That’s why investing in entrepreneurship is so important because we can sustain impacts like that.”

The sales tax picture

Another metric the NEDC looks at closely is sales tax trends.

Over the last five years, the city has posted some rollercoaster numbers but recent history indicates a trend toward a rise in sales tax returns.

In FY 2009, the city took in nearly $46 million in sales tax.

By 2015, it took in roughly $57 million.

Then the numbers slid to $56.1 million in 2016, then to $54.5 million in 2017.

In Fiscal Year 2018, the numbers started to bounce back as the city took in roughly $56 million.

Edmond and Moore also took a step back in 2016, but, unlike Norman, both bounced back with positive returns the following year.

What do those numbers mean for Norman?

“The trends in taxable sales indicate that Norman and Edmond were growing very much in tandem throughout this 30-year period,” said Robert Dauffenbach, associate dean at the OU Price College of Business. “Beginning in 2012, Edmond’s growth accelerated, and now exceeds Norman’s. Edmond’s accomplishment is now more than $2 billion in annual taxable sales.”

Dauffenbach said while Moore’s growth has been more steady and less volatile, both Norman and Edmond exhibit some cyclical sensitivity, and all three were affected by The Great Recession of 2008-09.

Now, he said all three cities are showing positive trends with the recovery of oil prices and, thus, the Oklahoma economy.

“All three shares of state total taxable sales are trending downward in recent times, but perhaps leveling out,” he said. “The present minor downtrend, of course, indicates that other regions of the state are slightly outperforming the region.”

Still, he said the three areas combine for 8.7 percent of state total taxable sales as of December 2018.

“That’s about one dollar of every $11.5 spent on sales subject to tax, indicative of regional dominance in Oklahoma,” he said.

“With continued growth of the national economy and improvement in the energy outlook, we can expect trend improvements and stability in shares of state totals. There is, however, increasing concern that a national recession is on the horizon, and while there will be a recession sometime in our future, there are few indications that one is imminent.”

Getting online sales tax back into Oklahoma municipal coffers — an ongoing effort at the Capitol — will go a long way toward solidifying Norman’s economic future, but the shape it takes depends on a lot of factors and whether the city embraces growth or regression.

Choosing growth doesn’t mean the city has to embrace a slew of new strip malls, but standing still, as former NEDC president Jason Smith often noted, means moving backward.


Can Norman afford to do that? We’ll find out.


Comparative sales tax collection trends

EDMOND:

2013: $59,227,932

2014: $62,562,107

2015: $64,177,164

2016: $63,389,136

2017: $64,092,340

2018: $66,678,267


MOORE:

2013: $24,316,867

2014: $24,429,169

2015: $25,933,719

2016: $25,630,292

2017: $26,265,300

2018: $20,526,661


NORMAN:

2013: $52,767,471

2014: $55,162,550

2015: $57,100,215

2016: $56,108,330

2017: $54,562,922

2018: $55,994,845

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