2020 Recap
- The strong start of the year gave way to halt and despair.
- Amarillo rebounded faster than other cities, as employment and retail sales moved up, led by stimulus and housing.
- Confidence shattered from Government shutdowns.
Areas of Economic Strength
- Housing boomed due to low rates
- Employment regained two-thirds of its loss
- Retail sales climbed back to positive by year-end
- Weaker dollar and foreign demand boosts commodity prices
Areas of Economic Weakness
- Job losses reached 20,000 before moving back to 8% true unemployment
- Energy collapse
- Tourism stopped, but auto travel rebounded in 2nd half
- Uncertainty regarding shutdowns
2021 Forecast
- Housing and retail sales will provide a boost for the first quarter.
- Commercial construction may give an added bump.
- Retail sales and auto sales should stay positive.
- Job growth in the 2nd half will support retail sales and housing.
- Pent up demand will help all sectors.
- Vaccine and end of lock downs will boost confidence.
Outlook for Specific Sectors
Real Estate
Low rates jump started housing beginning in the summer and pushed prices up over 10%. The boom should continue; and commercial will have a fine year.
Building Permits
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Housing Starts
|
454
|
406
|
512
|
477
|
505
|
403
|
479
|
550
|
Remodels
|
1,752
|
1,506
|
1,213
|
1,131
|
1,040
|
879
|
673
|
700
|
Roof Permits
|
6,304
|
2,260
|
1,778
|
3,910
|
2,136
|
4,178
|
3,839
|
2,000
|
Comm. Units
|
512
|
378
|
380
|
506
|
415
|
418
|
267
|
325
|
Total Value (mil)
|
$589
|
$485
|
$460
|
$686
|
$472
|
$332
|
$494
|
$650
|
Retail Sales
Stimulus and higher savings combined with low rates on homes and autos will juice spending, especially compared to the terrible 2nd quarter of 2020. 2nd half will be buoyed by more people working.
Year
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Sales Tax Collection
|
$71,801,582
|
$74,423,000
|
$74,412,780
|
$74,177,530
|
$77,261,171
|
$78,934,689
|
$81,094,099
|
$85,959,744
|
+1.5%
|
+2.9%
|
-0.00013%
|
-0.003%
|
+4.16%
|
+2.17%
|
2.74%
|
6.00%
|
Consumer Price Index (Amarillo)
- CPI was down in 2020 due to lower gasoline
- 2021 should see higher commodity prices drive up groceries and other goods
- Health care and miscellaneous will be up
- So CPI should increase 3% in Amarillo, while the National number is 2%
CPI Increases
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Amarillo
|
2.50% |
0.58% |
1.03% |
0.97% |
2.90% |
2.00% |
-1.23% |
3.20% |
National
|
2.20%
|
0.50%
|
1.70%
|
2.20%
|
2.20%
|
2.10%
|
0.20%
|
2.10%
|
Employment
- 20,000 jobs were lost, but two-thirds came back
- 6,000 workers left the Labor Force, so unemployment looked low (see Actual Unemployment)
- We see gradual increases in most industries, with hospitality improving in the second half
- The energy slump should heal slowly
12 Month Average
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Household Survey
|
130,800
|
125,741
|
126,825
|
129,300
|
129,667
|
129,939
|
122,155
|
125,000
|
Employers Survey
|
116,283
|
116,975
|
119,708
|
123,200
|
121,950
|
121,184
|
161,353
|
121,000
|
Average Unemployment
|
4.5%
|
4.0%
|
3.1%
|
2.2%
|
2.7%
|
2.5%
|
4.8%
|
5.5%
|
Agri-Business
Government checks offset lower yields due to drought, as commodity prices increased. Dairy and feedlots had profitable years. 2021 should be boosted by foreign trade, but yields may stay low due to La Nina. Input costs will squeeze margins for both dairy and feedlots, but both should remain profitable.
Yearly Average
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Wheat
|
$6.80
|
$4.90
|
$3.63
|
$3.68
|
$4.73
|
$4.30
|
$4.71
|
$5.20
|
Fed Cattle
|
$130.00
|
$148.00
|
$121.05
|
$121.50
|
$116.11
|
$115.71
|
$109.10
|
118.00
|
Corn
|
$4.90
|
$4.04
|
$3.59
|
$3.67
|
$3.89
|
$4.07
|
$3.85
|
4.10
|
Cotton
|
$78.00
|
$60.96
|
$60.33
|
$67.80
|
$69.65
|
$66.76
|
$58.56
|
68.00
|
Milk
|
$19.00 |
$15.75
|
$14.96
|
$15.94
|
$14.28
|
$16.25
|
$17.57
|
18.00
|
Energy
2019 saw production and income decline in the Panhandle. Lower gas prices ($2.33) due to a giant glut in supply in the Permian forced drillers to nearly stop activity. There were 20 rigs running at the start of 2019. Today there are 6. In the Permian, Producers were paying to have their gas shipped out due to lack of pipelines. Natural gas prices should stay around $2 and Oil should be around $60.
Yearly Average
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Active Rigs
|
72
|
26
|
9
|
15
|
22
|
10
|
2
|
1
|
Posted Oil (Avg)
|
$93.00
|
$46.04
|
$38.95
|
$47.50
|
$64.43
|
$58.17
|
$39.63
|
$45.00
|
Natural Gas (Avg)
|
$4.10
|
$2.74
|
$2.49
|
$3.13
|
$2.94
|
$2.68
|
2.13
|
2.50
|
Travel
Airline Boardings plummeted starting in mid-March, as did Motel occupancies. Travel by car recovered by the summer and November and December were ahead of last year. We expect airline boardings to stay weak, but motel tax should be up, especially compared to 2nd Quarter 2020.
Year
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Airline Boardings
|
372,205
|
343,996
|
337,237
|
342,709
|
360,762
|
366,640
|
232,585
|
250,000
|
-2.07%
|
-7.50%
|
-1.96%
|
+1.62%
|
+5.26%
|
+1.63%
|
-36.56%
|
+7.48%
|
Year
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Motel Tax
|
6,156,822
|
6,407,488
|
6,817,762
|
6,611,065
|
6,962,730
|
7,193,818
|
5,467,228
|
7,200,000
|
+5.02%
|
-5.00%
|
+6.40%
|
-3.03%
|
+5.31%
|
+3.32%
|
-24.00%
|
+31.69%
|
Bankruptcies were up slightly, even though the job market has been strong. They are trending in a range for the last seven years.
Bankruptcy Filings
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Annual Average
|
430
|
327
|
374
|
426
|
439
|
417
|
328
|
500
|
Amarillo Leading Indicators
|
2014
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021 (est)
|
Annual Average
|
-0.60
|
-7.40%
|
+1.50%.
|
-1.40%
|
-5.60%
|
-11.67%
|
1.50%
|
We do not forecast this. We let the numbers do that for us
|
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.
|