Economic growth keeps rolling
Jan 05, 2013 (Odessa American - McClatchy-Tribune Information Services via COMTEX) --
Economic growth continues in all sectors in the Permian Basin thanks to the continuing oil boom with record growth showing in commercial and residential construction and spending.
So far, no slowdown is in sight.
While there is a "modest slowdown" in oil and gas activity, so far there is no such slowdown in the growth of the local economies, according to the Midland-Odessa Regional Economic Index for November, prepared by Amarillo Economist Karr Ingham.
"While the regional oil and gas activity continues its very modest slowdown the Midland-Odessa general economy continues to expand in what appears to be unabated fashion," Ingham reported. "The November table of economic indicators reflects nothing but strong year-over-year-gains, both for the month and for the year to date."
And, so far, Ingham reports, there is no sign of a slowdown in the regional economy, "but in all likelihood, that will indeed be the case at some point."
Construction is booming in both metro areas, with $42,252,253 in building permits issued in Odessa and Midland for November, up 33.6 percent from last year. Up to November, a total of $702,589,704 in building permits were issued for the two cities, up a whopping 72 percent over last year.
"Commercial construction is through the roof," said Guy Andrews, economic development director for the Odessa Chamber of Commerce. "Commercial building comes and then housing follows and then the retail follows."
And sale of land for commercial projects continues at a strong clip, Andrews said.
"The lull that normally occurs in December when people shut down during the holidays did not happen," Andrews said. "People continue to approach us and we continue sell land on a daily basis -- I don't see any slow down whatsoever."
In addition a record number of new home permits emerged in November, with 93 permits issued, Ingham reported. That is up almost 18 percent over last year. From January to November, a total of 1,043 new home permits were issued in Odessa and Midland.
Likewise, existing home sales were up 18.6 percent in November, with 236 homes sold. From January to November, 2,813 homes were sold in Odessa and Midland up 11.8 percent over last year. The average home price went up 16.5 percent in November to $212,638.
"The builders are building as fast as they can and selling them before they can get them completed," said Bobby McCourt, president of the Permian Basin Board of Realtors. "Earlier this year we had problems with not enough housing and we are still not out of the woods yet."
McCourt said more new homes are being built in Odessa, and more existing homes are being sold in Midland.
"It is tough when you have a thriving and growing economy," McCourt said. "I look for 2013 to remain positive and to have good growth."
Spending was on the rise, too, with retail sales up 14 percent for $432,336,000 in retail sales logged for November and $4.2 billion from January to November, up 16.9 percent. Spending on automobiles was up 22.1 percent in November with $98,163,000 tallied for the month. Auto spending from January to November was up 31 percent topping $1.1 billion for the year. Hotel/motel tax receipts were up 53.5 percent for the year with $10,192,016 tallied for the year.
But as robust as the economy appears now, a slowdown is could be on the horizon in the foreseeable future.
"A lot of what we are seeing is indecision and regulatory questions that are unanswered," said Dennis Elam, with the Odessa American and business professor at Texas A & M University-San Antonio.
Elam said even though the building continues a slight stoppage in the oil business could change things. Even so, he predicts oil prices, which reached $93.09 on Friday, to go back up to $110 in 2013.
While Ingham predicts a slowdown, the numbers aren't projecting that yet.
"The numbers suggest but one thing -- continued boom conditions in the Midland-Odessa economy," Ingham reported. "Again, however the strong possibility exists that the frenzied pace of economic growth will begin to cool a bit in the coming months in response to the modest slowdown in the regional oil and gas economy."
Contact Celinda Hawkins on twitter @OAciti, on Facebook at OA Celinda Hawkins or call 432-333-7779.
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