In terms of the monthly numbers on the table of economic indicators used to calculate the Odessa Economic Index, only new single-family housing construction permits were improved compared to November of a year ago. (Again, even though employment continues to indicate year-over-year growth, that is just not the case and these monthly numbers will be revised downward in March with the annual release of revised employment data for Odessa and other metro areas in Texas.)
The monthly average West Texas Intermediate crude oil posted price dipped below $40/bbl in November, and has only worsened since then. The Texas Permian Basin Petroleum Index, a monthly measure of regional oil & gas activity, peaked in November of 2014 and has now declined for 12 straight months through November 2015 losing 33% of its value along the way – with more to come. The monthly average rig count also peaked in November of last year, and the November 2015 monthly average is off that peak by nearly 60%. And again, the rig count has worsened since then and is now down by about 63%.
Meanwhile, the Odessa general economy continues to give back some of the spectacular gains achieved over the five years 2010-2014. General real spending is losing ground in ever-larger chunks with inflation-adjusted taxable spending per November sales tax receipts down by 16.4% compared to November of a year ago (which, by the way, was up by over 20% compared to November of the prior year). Real auto spending was down by 25% in November, and hotel/motel activity in the third quarter per taxes collected in October and reported in November was down by over 30% year-over-year.
The construction sector registered its fourth straight double-digit percentage year-over-year decline in November (and the 7th thus far in 2015) dropping by a sharp 67% compared to November of a year ago. Building permit valuations through November are off nearly 50% compared to record permit activity in 2014. The number of new single-family residence permits (which experienced a down year in 2014) is the only component of the OEI to register improvement compared to year-ago levels, up by five permits for the month, and 68 permits (over 18%) for the year-to-date compared to the first eleven months of a year ago.
Home sales activity is faltering with the number of closed sales down some 39% in November compared to November 2014 (which in turn was up by 45% compared to November of the prior year). Through November the number of homes sold in Odessa is down by over 12%. The monthly average price declined by about 14% year-over-year; however, the November 2014 monthly average sale price was a whopping 28% higher compared to November of the previous year. The mathematical combination of sales and prices – the total dollar volume of residential sales activity (adjusted for inflation) – posted a record for the month of November in 2014 with a total that was over 80% higher than November of the previous year. The November 2015 total is down by about 49% compared to that record.
Coming together is a beginning; keeping together is a progress;
working together is a success.