March 2017

By Karr Ingham

InghamEcon, LLC
The Odessa Economic Index enjoyed its largest month-to-month increase since December 2014, rising to 191.0 in March up from 189.8 in February, an increase of 1.2 points from February to March.  The index remains below its year-ago level by 5.3% in March, but that gap continues to narrow and has closed from a 14.3% rate of year-over-year decline in July and August 2015.  The index improved significantly in the first three months of the year as well, increasing at a 4.2% annualized rate over the course of the first quarter 2017.
General spending, auto spending, airport activity, new housing construction (at record levels), existing home sales, and the total dollar volume of residential real estate sales all expanded by double-digit percentage points in March compared to year-ago levels.  Building permits were down for the month and employment remains slightly in negative year-over-year territory, though the unemployment rate is once again lower compared to the same time last year.
The Texas Permian Basin Petroleum Index continues to signal recovery and expansion in the regional oil & gas economy as well, improving for the sixth consecutive month to 234.3 in March up from 229.6 in February, and up 5.9% from the March 2016 oil & gas index of 221.3. 
Crude oil prices retreated in March, averaging $45.50 for the month (WTI posted), down from over $50 in February but up by over 30% compared to March of a year ago.  The regional rig count continues to climb, averaging 263 for the month (RRC districts 7C, 8, & 8A), the highest since February 2015.  The number of drilling permits issued (also the 7C, 8, and 8A total) soared upward in March to 772, the highest monthly total since October 2014. 
General spending is finally beginning to gain some noticeable growth traction with real (inflation-adjusted) spending per March sales tax receipts up by 18% compared to March of last year (which in turn was down by 26% compared to the prior year).  That pulled the first quarter into positive year-over-year territory for the first time since the second quarter 2015, up by 3.4% compared to the first quarter 2016. 
First quarter auto sales activity posted its quarterly first year-over-year increase in two years, up by 15% for the quarter, and up by 11% in March compared to March of last year.
Construction activity declined in March after strong increases in January and February, with real permit valuations down by nearly 40% compared to the March 2016 total.  The first quarter total was respectable enough, however, down just slightly compared to the first quarter 2016. 
The 155 new housing construction permits issued in the first quarter is the highest first quarter total on record, and was up by 55% compared to the first quarter 2016.  And in fact it is among the highest
quarterly permit totals for any quarter and marks only the fourth time the quarterly number of permits issued has exceeded 150.  The March monthly permit total of 71 is the second-highest on record, down only compared to the 77 permits issued in September 2013.  It is easily the highest on record for the month of March, a 65% increase over March of last year. 
First quarter home sales activity increased sharply as well with 259 closed sales in the first three months of the year, the highest first quarter sales total since 2012.  The March sales total is actually a March monthly record at 119, an increase of over 30% compared to March of last year.  The March monthly average home sale price was up by a solid 4.4% year-over-year, while the first quarter average is up only slightly compared to the first quarter 2016.  The total real dollar volume of residential real estate sales activity in Odessa is up sharply for the month and quarter, posting year-over-year increases of 33.6% and 16.5%, respectively.
The Odessa employment situation continues to reflect very modest improvement through the month of March.  Estimated total payroll employment remains down compared to year-ago levels, but stands a solid chance of returning to positive year-over-year territory next month having narrowed that gap almost entirely at this point.   It certainly appears as though total employment in Odessa has turned the corner and is now adding jobs once again, albeit in small numbers.  The unemployment rate has stabilized and in fact is on the decline at 5.6% in March compared to 6.4% in March of a year ago. 
Don't count the days

make the days count!

Muhammad Ali
Odessa Development Corporation
Wesley R. Burnett, CEcD, MPA
Director of Economic Development

Odessa Chamber of Commerce

700 North Grant, Suite 200
Odessa, Texas  79761
(432) 332-9111
(432) 333-7858 (Fax)

Tracy Jones
Economic Development Specialist

Teresa Vasquez
Administrative Coordinator

Kathi Vaughn
Research and Communication Specialist


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