Amarillo’s economy continues our roller coaster ride; however, it is a strong positive step, with large improvements in retail sales, motel taxes and record building permits.
Retail Sales for February were up 9% over the previous 12 months, bringing the YTD to a 4.2% increase. These sales are across the board and reflect reopenings. New auto sales are down due to inventory shortages caused by lack of chips for manufacturing. This shortage is getting much worse and driving buyers to used cars, whose prices are increasing again after the Fall lull.
The Household Survey shows an increase of 591 jobs for the month, but down 3,604 from a year ago. The Employer’s survey shows an increase of 2,507 from a year ago, but down .5% for the month. These numbers reflect the annual adjustments.
The boom in Motel occupancy reached a giant peak, with a 49% increase over last February, with highway traffic setting records throughout the City. However, airlines continue to be slow, especially with Southwest cutting the number of flights. The traffic numbers picked up in early March.
The Amazon Warehouse pushed Building Permits to a record high of $160 million. Its fast track construction will boost employment and spending over the next 6 months, adding over 300 jobs to our economy.
Housing starts are flat, with a year ago, but new home construction costs are up 16%. Existing home sales continue at near record levels, even though mortgages are up slightly. The 16% increase in prices and quick sale times are pushing prices up faster than appraisals can keep up with.
Good news on the commodity front, as drilling rigs are up to 4 from zero a few months ago. Oil prices are up 108%, and natural gas prices up 41%. This will keep this sector going, but does not reflect levels seen in previous upturns.
Recent good moisture will help the wheat crop. Commodity prices benefit from the soft dollar and overseas demand, with corn up 41%, wheat up 50% and cotton up 16%. Dairy continues moderately profitable and cattle have stayed profitable. The February freeze did not have the potential bad affects feared for most producers.
Stimulus money is flowing into consumer’s pockets, savings accounts and coffers of cities, counties, airports and schools. Much of this money will be an extra bonus, providing a surge in spending over the next year.
Another example of the resurgent in our economy is our bank’s programs for forbearance on loans due to the Pandemic. At the peak we had 7,000 auto loans in forbearance and that number has dropped to only 500 today. Likewise, mortgage forbearance has dropped from 1,600 to 400. These are both signs of consumer strength and the strong character of west Texas people. All this continues the much better economic news we have been seeing for the last few months.
*Base-100, January 1988
This document was prepared by Amarillo National Bank on behalf of itself for distribution in Amarillo, Texas and is provided for informational purposes only. The information, opinions, estimates and forecasts contained herein relate to specific dates and are subject to change without notice due to market and other fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources believed to be accurate, complete and/or correct. The information and observations contained herein are solely statements of opinion and not statements of fact or recommendations to purchase, sell or make any other investment decisions.
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