Amarillo Economic Analysis

Amarillo's economy showed strength in retail sales, vehicles, and agri-business, while housing has softened.

Sales taxes for August were up 5.8%, bringing the YTD to a positive 3% (which about equals inflation). Retail sales are hurt by fears of ICE raids in some locations. New vehicle sales were up 16%, while Used were up 13%. Travel saw a 3% boost in Airline Boardings, while Motel tax collections were down 2%, but the sectors had a good summer.

Employment numbers have not been published due to the government shutdown. The Dallas Fed published an article "Immigration crackdown likely contributing to weak Texas job growth". We continue to doubt the veracity of the numbers because of the fear of ICE raids among employers and households.

Housing has slowed in Amarillo, with starts down 44% from a year ago and some softening of prices. However, the Median price was up 4% from last year, but reports of sales below asking price are growing. Commercial construction continues to boom, with the packing plant and the A.l. construction helped up the 78% increase in YTD Building Permits. For the month, we were off 18% from last year, but this sector will continue to be strong over the next year.

Oil prices dropped 17%, but a 25% jump in Natural Gas prices has boosted our energy sector, and two drilling rigs are now operating-up from zero last month.

Farmers have had a fine year, with the good rains resulting in much higher yields. Prices have been soft due to tariff concerns, but overall farm income will be up, even though wheat prices were down 29%, corn flat, and cotton prices down 4%. Little cotton was grown in our area this year. Although, yields were up around Lubbock.

Cattle continue to be very strong, with fat cattle prices up 30% from last year. Milk prices are down 25%, but dairies are seeing profits from the sale of their cattle, offsetting pressure from lower milk prices.