Amarillo Economic Forecast for 2024
2023 Recap
Slowing, but steady growth for Amarillo in the face of higher interest rates and inconvenient rains. Ag and oil contributed less; however, cattle had a fine year. Job growth and retail sales increases slowed to about 1.5%, while tourism was mixed.
Areas of Economic Strength
- 2,000 more people working
- Higher wages and salaries
- Jump in airline boardings
- Higher interest rates helped savers
- Commercial construction remained robust
- Amarillo’s population exceeded 200,000
Areas of Economic Weakness
- Higher rates hurt housing and auto sales
- Tourism slowed
- Farm commodity prices and yields declined
- Even dairy had a poor year
- Housing starts declined
- Slumping prices for oil and especially natural gas
2024 Forecast
- Continued flattening, while avoiding a recession
- Commodity prices should hold or increase
- Lower rates will help housing, auto sales, and business expenses
- Federal government largesse will decline
- Higher insurance costs will offset lower gasoline prices
- Inflation pressures continue to ease
- Student loan payments resuming will add more pressure to consumers
Outlook for Specific Sectors
Employment
2023 had less job growth, but incomes increased at levels near the rate of inflation. Owens Corning had a November layoff. 2024 has no major job changes or major new employers on the horizon.
| 12 Month Average | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Household Survey | 129,300 | 129,667 | 129,339 | 122,155 | 127,228 | 130,509 | 133,106 | 131,000 |
| Employers Survey | 123,200 | 121,950 | 121,184 | 116,353 | 120,714 | 124,350 | 127,525 | 125,000 |
| Average Unemployment | 2.20% | 2.70% | 2.50% | 4.80% | 4.13% | 2.93% | 3.13% | 3.00% |
Retail Sales
2023 Retail sales increase dropped below the rate of inflation, as consumers cut back and higher interest hurt large purchases. 2024 should see increases slightly below the rate of inflation, as moderate job and wage growth generates more disposable income.
| Sales Tax Collections | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Amount | $74,177,530 | $77,261,171 | $78,934,689 | $81,094,099 | $91,925,630 | $99,980,813 | $100,432,055 | $101,500,000 |
| % Change | -0.003% | 4.16% | 2.17% | 2.74% | 13.35% | 8.77% | 0.45% | 1.10% |
Consumer Price Index
| CPI Increases | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Amarillo | 0.97% | 2.90% | 2.00% | -1.23% | 6.29% | 9-11% | 8.79% | 4.00% |
| National | 2.20% | 2.20% | 2.10% | 0.20% | 6.80% | 8.50% | 4.39% | 3.80% |
Real Estate
Pent up demand slowed the drop in housing starts caused by the doubling of mortgage rates. Home prices of new and existing increased modestly. Apartment rent softened. Meanwhile, commercial construction stayed very strong, boosting building permit totals. 2024 will have slower new home construction, since job growth is modest. Commercial projects will stay robust. Home prices should be near flat, as mortgage rates are now lower by 1% at year-end.
| Building Permits | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Housing Starts | 477 | 505 | 520 | 666 | 746 | 971 | 923 | 700 |
| Remodels & Roofing | 5,041 | 3,176 | 5,057 | 4,512 | 4,114 | 1,356 | 5,869 | 2,000 |
| Commercial Units | 506 | 415 | 418 | 267 | 381 | 690 | 874 | 900 |
| Total Value (mil) | $686 | $472 | $332 | $494 | $961 | $530 | $392 | $340 |
| Median House Value (000) | $159 | $155 | $180 | $200 | $220 | $235 | $240 | $246 |
Agri-Business
2023 had poor moisture timing and lower commodity prices, as farmers suffered a one-two punch. Dairy had the first tough year in years. Cattle boomed, bucking the Ag Trend. High cattle prices should correct some in 2024, while dairy and farming should see stronger prices. As always, rain will determine yields. Cotton production was off 50%+ in 2023 and should improve from the low levels. Current prices are lower than 2023 YTD averages shown here.
| ($ Average) | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Wheat | $3.68 | $4.73 | $4.30 | $4.71 | $7.00 | $9.55 | $7.30 | $6.50 |
| Fed Cattle | $121.50 | $116.11 | $115.71 | $109.10 | $121.29 | $143.50 | $174.37 | $173.00 |
| Corn | $3.67 | $3.89 | $4.07 | $3.85 | $5.66 | $6.91 | $5.60 | $5.50 |
| Cotton | $67.80 | $69.65 | $66.76 | $58.56 | $71.41 | $93.51 | $78.51 | $80.00 |
| Milk | $15.94 | $14.28 | $16.25 | $17.57 | $ 16.76 | $21.79 | $17.58 | $16.75 |
Energy
Natural gas prices plummeted during 2023, while oil was “up and down” ending the year lower. Strong production will keep 2024 prices low resulting in lower transportation costs, reducing inflation rates. Drilling rigs are more efficient, so less rigs are needed in our area both for new horizontal wells and workovers.
| Yearly Average | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Active Rigs | 15 | 22 | 10 | 2 | 5 | 8 | 5 | 4 |
| Oil (Panhandle) | $47.50 | $64.43 | $58.17 | $39.63 | $68.43 | $94.83 | $77.90 | $74.00 |
| Natural Gas | $3.13 | $2.94 | $2.68 | $2.13 | $3.65 | $6.46 | $2.68 | $2.60 |
Travel
Airline boardings jumped early in 2023 and continued strong, as more local passengers traveled. Hotel occupancy rates dropped 3%, while Bed Tax declined 15% due to AirBNB and extended stays hurting tax receipts. 2024 Airline boards should be up slightly, while the Bed Tax should be up 3%, as more rooms are coming on line and room rates will be under pressure.
| Travel | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Airline Boardings | 342,709 | 360,762 | 366,640 | 232,585 | 298,220 | 365,983 | 399,299 | 412,000 |
| -1.62% | +5.26% | +1.63% | -36.56% | +28.00% | +22.70% | +9.10% | + 3.50 | |
| Motel Tax | 6,611,065 | 6,962,730 | 7,193,818 | 5,467,228 | 8,717,588 | 9,381,000 | 9,289,524 | 9,100,100 |
| -3.03% | +5.31% | +3.32% | -24.00% | +59.45% | +7.61% | +0.975% | + 2.04% |
Bankruptcy Filings
Less Covid payments should reverse the 3-year downtrend.
| Bankruptcy | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Filings | 426 | 439 | 417 | 328 | 297 | 240 | 284 | 310 |
Amarillo Leading Indicators
We do not forecast this, as the formula looks six months ahead. December was slightly negative.
| Amarillo Leading Indicators | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 (est) |
|---|---|---|---|---|---|---|---|---|
| Annual Average | -1.40% | -5.60% | -11.67% | 1.50% | 2.92% | 4.77% | 8.79% | We do not forecast this, as the formula looks six months ahead.December was slightly negative. |