|P.O. Box7531||Phone: (806) 373-4814|
|Amarillo, TX 79114||Fax: (806) 373-5370|
December 2, 2013
The Midland-Odessa Regional Economic Index
Texas Permian Basin Petroleum Index
The Midland-Odessa Regional Economic Index posted its 44th straight monthly increase in October, rising to 214.9 up from 213.7 in September (revised slightly downward from 213.8 with the release of the updated September employment data), and up 7.9% from the October 2012 MOREI of 199.2. The Texas Permian Basin Petroleum Index has been on the rise for 47 months now, increasing to 340.3 in October up from 339.2 in September, and up 6.3% from the October 2012 regional petroleum index of 320.0.
The monthly table of general economic indicators continues to look very solid, with – interestingly enough – only quarterly hotel/motel tax receipts down slightly compared to extraordinary numbers from a year ago. General real spending and employment continue to build on the sharp increases of recent years, the construction sector remains on fire, and housing prices are still on the rise.
Crude oil prices remain higher compared to year-ago levels, but retreated in October after averaging over $100/bbl for the prior three months. Higher gas prices are providing a revenue boost to Permian Basin producers, but have done little to shift E&P activity from crude oil to natural gas, with monthly gas well completions across the region not yet totaling 100 for the year-to-date. The regional rig count in October fell to its lowest monthly average thus far in 2013 (but has recovered in November). Drilling permits continue to lag behind the peaks established in 2011-2012, while the industry is still adding jobs at an impressive pace through October.
The core benchmark economic indicators of general real (inflation-adjusted) spending and employment remain on the rise through October, and again, the concurrent trends in these two critical economic indicators virtually define cyclical economic performance at the local level. Inflation-adjusted general spending per October sales tax receipts in Midland-Odessa is up by over 10% compared to October of a year ago, and the year-to-date through October total is up by some 8.4% compared to the same period in 2012. Since bottoming out in the recession year of 2009, general real spending is up by about 75% at this point in 2013; the October monthly total is well more than double the October 2009 monthly spending total.
An estimated 7,700 jobs were added to the combined metro area economy over the last 12 months, of which nearly 3,500 were added to oil & gas companies in Midland-Odessa. The year-over-year growth rate of nearly 5% continues to top all Texas metro areas as well as most metro areas nationwide. While there are a handful of metro areas in the country with slightly higher job growth from October 2012 to October 2013, none come close to the employment growth in Midland-Odessa over a longer period of time, particularly post-recession. The unemployment rate remains on the decline as well, dipping to 3.3% in October, the lowest monthly unemployment rate of 2013 but only a tenth of a point lower compared to October of a year ago.
Auto sales are “only” 3.1% higher in October compared to October of a year ago; however, the October 2010, 2011, and 2012 inflation-adjusted auto spending totals were each improved by well over 30% compared to the prior year. For the year-to-date, real auto spending is up by some 3.4% compared to the first ten months of a year ago.
Hotel/motel tax receipts in Midland-Odessa (the third quarter 2013 total) posted a slight year-over-year decline for the first time since the second quarter of 2010. The third quarter 2012 hotel/motel tax total was over 50% higher than the second quarter of the prior year, so occupancy spending levels remain extraordinarily high. But it does represent an important leveling of activity in the hotel/motel sector after three years of growth at an incredible pace.
Construction across the metro area remains sharply higher after yet another month of triple-digit year-over-year growth in building permit valuations (over 140% in October). For the year-to-date, building permit valuations are up over 70% for the second straight year. Housing construction continues its pattern of sharp increase as well with the number of new single-family residence building permits up by nearly 18% compared to October 2012, which in turn was up by over 50% compared to October of the prior year. For the year-to-date, home building according to this measure is up by over 20% compared to the year-to-date through October 2012 total.
Existing home sales remain flat for reasons well-explored over the years – a shortage of homes to be sold at current price levels. And those price levels continue to rise with the October monthly average price up by 7.5% in October (year-over-year) and over 8% for the year-to-date. The total dollar volume of real (inflation-adjusted) sales activity is up by about 8% thus far in 2013 compared to the first ten months of a year ago.
2013 Ingham Economic Reports
January '13 Ingham Economic Report
| August '13 Ingham Economic Report
Sept '13 Ingham Economic Report
Oct '13 Ingham Economic Report
2012 Economic Indicators
Midland, Texas Economic Indicators
Midland-Odessa Economic Index
Texas Permian Basin Petroleum Index | Chart
Midland-Odessa Regional Economic Index
& Texas Permian Basin Petroleum Index Chart 1
Midland-Odessa Regional Economic Index
& Texas Permian Basin Petroleum Index Chart 2