February 2016

By Karr Ingham


InghamEcon, LLC
The contraction in the Odessa metro area general economy is now 13 months in the making; the Odessa Economic Index declined in February to 206.9 down from 209.5 in January, and down 10.6% from the February 2016 OEI of 231.4.  The Odessa Economic Index peaked in January 2015 at 231.9, and is down by 10.8% from that pinnacle through February 2016.

Increased building permit activity for the month, along with new single-family housing construction and existing home sales were insufficient to overcome continued sharp declines in general spending, auto sales, hotel/motel activity, and employment. 

 
The Texas Permian Basin Petroleum Index also declined again in February, falling to 225.4 for the month down from 233.4 in January, and down 36.6% from the February 2015 TPBPI of 355.7.  The regional oil & gas activity index peaked at 381.2 in November 2014, and has now fallen by 41% compared to that peak level.  The posted West Texas Intermediate crude oil price averaged $27.08 in February, a decline of 43% from its year-ago level.   The daily low point in the current decline was $22.75 on February 11, which is about 80% below its mid-2014 levels prior to the onset of falling prices for crude oil.  The regional rig count averaged 151 for the month, a 50% decline compared to the February 2015 monthly average.  Through Friday of last week (April 1), the rig count for Railroad Commission Districts 7C, 8, and 8A totaled 130, a decline of 72% from the weekly peak of 468 in November 2014. 
 
Real (inflation-adjusted) spending per February sales tax receipts was down by 23% compared to February of a year ago (which in turn was up by 17% compared to February of the prior year).  Through February real taxable spending is down by 20.5% compared to the first two months of 2015.  Real auto spending posted a 20% year-over-year decline in February and is down by 35% for the year-to-date.
 
Payroll employment in the Odessa metro area fell by an estimated 5,200 jobs over the last 12 months, a decline of 6.6% compared to February of a year ago.  The mining (oil & gas) sector was the hardest hit with “mining, logging, and construction” losing 3,000 jobs over the year, followed by “trade, transportation, and utilities” which lost 1,300 jobs compared to February of a year ago.  The manufacturing sector lost an estimated 900 jobs over the last 12 months.  The unemployment rate continues to move upward at 5.6% in February compared to 3.7% in February 2015.

 
Not all indicators were lower in February, however.  Construction activity was sharply higher for the month with building permit valuations up by 114% in February compared to February of a year ago.  And in fact, that would be a record for the month of February if not for the $400 million series of permits issued in February 2001 for a new power plant in Odessa.  Even at that, however, real permit valuations are down by 19% for the first two months of the year.  Single-family housing construction is up for the month and year-to-date with 57 permits issued through February compared to 55 in January-February of a year ago.
 
Existing home sales also improved in February with an increase of 8% in closed sales compared to February of a year ago.  The prices of those sales continue to climb with the February monthly average up by 5% compared to February of a year ago, and up by over 12% on average for the first two months of the year. 
 
Optimism is the faith that leads to achievement.  Nothing can be done without hope and confidence.

Helen Keller

 
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Scott G. Jones
Economic Development Director 
Odessa Chamber of Commerce

700 North Grant, Suite 200
Odessa, Texas  79761
(432) 332-9111
(877) 363-3772 (Toll Free)
(432) 333-7858 (Fax)


scottj@odessaecodev.com
www.odessatex.com
www.odessachamber.com
www.growodessa.net
 

Tracy Jones
Economic Development Specialist
tracyj@odessaecodev.com
432-333-7886

Teresa Vasquez
Administrative Coordinator

teresav@odessaecodev.com
432-333-7881

Brittany Sotelo
Marketing Specialist
brittanys@odessaecodev.com
432-333-7882

Kathi Vaughn
Research and Communication Specialist

kathiv@odessaecodev.com
432-333-7883

 

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