Amarillo’s economy held surprisingly steady, as Texas reopened the economy after the pandemic shutdown.
Retail sales were flat compared to 12 months ago and year to date. This compares to declines of 17% in New York City and other closed cities.
Car sales were stronger than expected with new cars up 6% from a year ago and used cars up 13%.
Tourism has come to a halt, with less people flying (boardings down 84%) and staying in hotels (Hotel/Motel Tax down 57%).
Employment is a little worse than reported. We think the unemployment rate is around 10.5% both here and Lubbock (versus the 6% reported by the State-but they do not count the 6,100 who dropped out of the work force). The Household Survey shows a decrease of 10,134 jobs and the Employers’ Survey is down 7,600. Most of the losses are in Hospitality and Energy.
Large Construction has held up well during the pandemic. Building permits are up 150% from a year ago. Year to Date permits are up 30%. Residential starts are down 40% and a flat year to date.
Housing is strong, with close the record sales for Amarillo and prices up 17%. Low rates (2.88% 30-year mortgage) and people’s fear that the government will shut them down again in the future are driving people to look for better housing.
Commodities are suffering. There are 0 drilling rigs operating in the Panhandle. Natural Gas prices remain under $2 at $1.74, down 25% from a year ago. Oil is at $40, down 32% from last July.
The drought it getting more and more severe with the recent heat wave. There was some wheat cut earlier this Summer and prices are down 7% from a year ago. Some cotton has been planted and prices are down 23%.
Dairies are faring better with $21.50 milk, up 28% from last year. We will watch school openings to see if the supply is met with demand. Cattle are decent with prices at $98, down 10% from a year ago.
Our bank will watch the 3rd quarter as a gauge on economic momentum. The virus remains with us and with the PPP coming to an end, we will see if Washington D.C. has any more stimulus in store. There is more uncertainty out there than we saw in March.
*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.
Big Picture Economics
The Federal Reserve Bank of Dallas published a paper on analyzing the effects of the economic downturn. They looked at “High Risk Industries” and their effect on individual cities.
These industries employment levels are:
These industries may have bigger unemployment shocks as the resulting drag on the cities. They said Midland, Odessa and Laredo had the highest share of employment at 43%, 33% and 30%. Waco was one of the lowest at 15%. Statewide is 21% and nationally 13%
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