Job losses are forecast for the Tulsa metropolitan area this year and next, according to a midyear economic update prepared by the Center for Applied Economic Research at Oklahoma State University.

The average annual nonfarm employment for the metro area is forecast to fall by 1.5 percent this year, but the area is showing signs of stabilization ahead of much of the state, the report says.

Mining and manufacturing are among the sectors forecast to lose jobs this year and next. Education and health services, government, and leisure and hospitality are expected to post job gains next year.

The report forecasts that the Tulsa area will have an average annual total of 429,510 jobs, down from an estimated 436,050 last year. By next year, that total is forecast to drop an additional 0.2 percent to 428,800, the report says.

"Employment in 2010 remains difficult to forecast as the economy could still move in any number of directions. Much more will be known as third and fourth quarter 2009 data become available," the report says. "On average, we believe, employment will be flat in 2010 (barring a double dip or commercial real estate collapse) with modest declines in the early part of the year followed by modest gains in the latter half."

Despite the drop in employment, the report forecasts that the metro area's real gross metro product will grow 4.4 percent this year to $37.3 billion and 3.2 percent next year to $38.5 billion.

Russell Evans, a research economist who is the director of the research center at OSU's Spears School of Business, said the report contained some numbers that surprise him a bit, including those for the area's real gross metro product.

On the one hand, the Tulsa area is seeing moderate increases in production in spite of almost uniform across-the-board employment contraction, he said. It's possible that some sectors such as utilities, which is forecast to see job gains this year and next, and other sectors that have high-value production could see a lot of output with a small employment increase, he added.

The report says: "The unemployment rate is still likely to tick up a bit as the Tulsa economy reaches bottom and heads into recovery. By the end of 2010, however, unemployment rates are projected to fall below 6.5 percent and continue to trend downward into 2011."

The area's unemployment rate remained steady in July at a six-year high of 6.8 percent.

A rising unemployment rate is not necessarily bad, said Bob Ball, the economic research manager for the Tulsa Metro Chamber. "The unemployment may rise, but it's because people expect to go to work and they enter the labor force," he said.

The report notes how mining and manufacturing are among the key sectors reducing their work forces.

After expanding its work force last year, natural resources and mining could see its annual average employment drop to 6,870 this year and 6,130 next year, down from 7,250 in 2008.

However, mining employment could rebound with a cyclical recovery of energy prices and a new administration's energy policy, the report says.

Manufacturing employment losses could be more long term. The report's forecast is for that sector to drop from an annual average of 53,140 jobs last year to 48,690 jobs this year and 44,680 by next year in the Tulsa area.

Ball said he didn't think the metro area will see the kinds of drops in manufacturing and mining as outlined in the report. Manufacturing "may continue to be slightly negative, but it will be growing in the last half of 2010," he said.

Although the center's report forecasts a 0.6 percent drop this year in the average annual employment in the area's education and health services, it points to a 2.8 percent increase next year.

The report forecasts a 4.0 percent increase in government jobs this year and a 1.5 percent increase next year. Leisure and hospitality, likewise, is forecast to add jobs this year and next.