Oklahoma Economy: Oil, Gas, and Aerospace

Oklahoma is a mid-sized state economy, usually ranked in the lower-middle of U.S. states by GDP — the dollar value of everything a place makes and sells in a year. The Oklahoma economy is built on oil and gas, aerospace, agriculture, and a fast-growing logistics and aviation services sector around Tulsa and Oklahoma City.

This is a plain-English tour. For the national picture, see The State of the U.S. Economy and the Economy hub.

How big is the Oklahoma economy?

For example, recent state GDP for Oklahoma has run around $230 billion, according to the Bureau of Economic Analysis. Population is roughly 4.1 million, per the U.S. Census Bureau. Oklahoma City and Tulsa are the two metros that drive the state economy, with Lawton and Norman as smaller anchors.

The biggest industries

Oklahoma's industry mix tilts toward energy and aerospace. The main pillars are:

• Oil and natural gas — Oklahoma is one of the top crude oil and natural gas producing states; the SCOOP and STACK plays in central Oklahoma have been major drilling targets.
• Aerospace and defense — Tinker Air Force Base in Oklahoma City is the largest single-site employer in the state and the Air Force's main aircraft maintenance depot; American Airlines runs its largest maintenance base in Tulsa.
• Agriculture — wheat, cattle, hogs, and poultry are all major; Oklahoma is one of the top wheat-producing states.
• Logistics and distribution — Oklahoma City sits on I-35 and I-40, making it a natural hub for warehousing and trucking.
• Energy services — Tulsa was historically known as the "Oil Capital of the World" and remains home to many energy firms and oilfield services companies.
• Tribal economies — Oklahoma has the largest Native American population of any state, and tribal nations operate major casinos, businesses, and government services.

Jobs and wages

Oklahoma labor data is published by the Oklahoma Employment Security Commission, with national-level numbers from the Bureau of Labor Statistics. For example, the Oklahoma unemployment rate has typically run close to or below the national average, with Oklahoma City often the tightest labor market in the state.

The Oklahoma minimum wage is tied to the federal floor of $7.25 per hour. Many large Oklahoma employers — Tinker Air Force Base contractors, energy firms, and American Airlines — pay well above that on their own.

Taxes in Oklahoma

Oklahoma has a graduated state income tax with relatively low top rates. The legislature has periodically lowered rates and broadened deductions.

The state sales tax rate is 4.5%, with local add-ons that push the combined rate to about 8.5-9% in many cities. Groceries are subject to local sales tax in many areas. State tax forms and rules live at the Oklahoma Tax Commission. You can read more about how sales tax works in our glossary.

Cost of living

Cost of living in Oklahoma is among the lowest in the country. Oklahoma City and Tulsa remain affordable; rural areas are cheaper still. The federal government tracks region-specific Consumer Price Index data through the BLS Southwest region, and HUD publishes Fair Market Rents for every county at HUD User.

The energy cycle

Oklahoma's economy still moves with oil and gas prices. The SCOOP and STACK shale plays brought a wave of drilling and high-paying jobs in the 2010s; activity has since cooled but remains meaningful. Devon Energy and Continental Resources are headquartered in Oklahoma City, and natural gas processing and pipeline operations are big employers in the western part of the state. When prices fall sharply, the state typically sees a quick pullback in drilling, layoffs in oilfield services, and a drag on overall tax collections.

Tinker and the aerospace base

Tinker Air Force Base on the southeast side of Oklahoma City is the largest single-site employer in the state, with tens of thousands of military and civilian workers. The base does heavy maintenance on B-1 bombers, B-52s, KC-135 tankers, and engines for many other aircraft. Around it, a deep base of contractors and parts suppliers has grown up, making Oklahoma City one of the more important aerospace maintenance hubs in the country.

Tulsa's reinvention

Tulsa earned the nickname "Oil Capital of the World" in the early 20th century, when the Glenn Pool boom made it briefly one of the wealthiest cities in the country. Energy is still a meaningful part of the local economy, but Tulsa has worked over the past decade to diversify into healthcare, aerospace (American Airlines maintenance base), and tech, including a high-profile remote-worker incentive program called Tulsa Remote.

How does the Oklahoma economy fit into the national picture?

Oklahoma is more concentrated in oil and gas, aerospace, and agriculture than the national average, and less concentrated in finance and tech. Population growth has been steady and positive, supported by relatively affordable housing and the state's central location.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and the Oklahoma Tax Commission for the most current data.