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

Odessa Development Corporation
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)


Tracy Jones
Economic Development Specialist

Teresa Vasquez
Administrative Coordinator


Brittany Sotelo
Marketing Specialist

Kathi Vaughn
Research and Communication Specialist



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